A reverse mortgage servicing transfer notice is the written goodbye from the current servicer and the hello from the next one, sent at least fifteen days before the effective date. Jay Zayer, CRMP, is a reverse mortgage specialist at reversemortgage.coach. 24 CFR 206.201(c)(2) and 12 CFR 1024.33(b)(4) are the rules. The originator you liked is often not the shop that boards the loan.
Paloma, 68, occupies a house in Yucaipa, California and got a letter naming a company she had never met. She assumed it was a scam because I had originated the file. It was the transfer 24 CFR 206.201 allows. See what a servicer does. Stay here for what the notice must contain and what you change the week it arrives.
A HECM is FHA-insured. A hello letter is not a new origination.
What information has to be on the transfer notices?
The effective date. The name, address, and contact information for the transferor and the transferee. Where to send payments if any, and where to send draw requests and occupancy certifications. 12 CFR 1024.33(b)(4) lists the RESPA content. 24 CFR 206.201(c)(2) requires both mortgagees to notify the borrower at least fifteen days before transfer, and HUD within fifteen days.
Paloma’s unused line does not reset. Paloma’s origination leftover cash sat in the mid-30s to low-50s percent of then-appraised value, depending on age and expected rate. Do not rerun the calculator because the letterhead changed. Do not interpolate HUD rows. Ask the new shop for a written unused-line figure if you need one.
Change the mortgagee clause on homeowners insurance immediately. A claim paid to the old shop is how files stall. Do not cancel coverage in the gap. If a LESA pays insurance, tell the new shop how the old shop was billing the carrier. Jay confirmed a LESA cannot be added just because servicing moved.
What should you do the week the hello letter arrives, in order?
Read both letters. Note the effective date. Update insurance. Update the HOA if they bill a mortgagee. Update any automatic draw instructions. Complete the next occupancy certification with the new address. Throw away the old draw fax number.
A second geography: a 73-year-old in Peoria, Arizona whose hello letter arrived while she was traveling. Mortgagee Letter 2023-23 still wants the annual certification. Forwarding it to the old shop after the effective date is how “I sent it” becomes “we never got it.”
An adjustable HECM still accrues at 1-month CMT plus lender margin under the same note. A transfer does not freeze the index. Annual MIP of 0.50 percent of outstanding balance still accrues (HUD Mortgagee Letter 2017-12). Initial MIP does not charge again.
If the fifteen-day notice was late, 12 CFR 1024.33 is the RESPA complaint path sitting next to 24 CFR 206.201. Keep the envelopes.
How is a transfer notice different from a due-and-payable notice?
Transfer is who services a living loan. Due-and-payable is 24 CFR 206.27 after death, a move, or a charge default. Mixing the two is how families panic at a hello letter and ignore a later default letter. See due-and-payable.
Counseling at origination cost $125–$175. The certificate lasted 180 days. California Civil Code 1923.2(k) does not sit on a transfer. Arizona never had that statute and still gets 24 CFR 206.201 notices.
The 2026 claim cap of $1,249,125 (HUD Mortgagee Letter 2025-22) does not change because letterhead changed. Origination, once capped at $6,000 under 24 CFR 206.31, does not reverse.
Heirs who later keep Paloma’s Yucaipa house still repay the outstanding balance under 24 CFR 206.125(a)(2)(i). They request the payoff from whoever the last hello letter named, not from my origination file.
What if two hello letters arrive naming different companies?
Call both numbers on the letters. Ask which effective date controls. Keep copies. A dual-tracking mix-up is a RESPA complaint waiting to happen, not a reason to send occupancy mail into the void. 12 CFR 1024.33 still wants a clean transfer. 24 CFR 206.201 still wants HUD notified.
Paloma should update insurance only after she knows the surviving mortgagee clause. Updating twice in a week is cheaper than a force-placed policy. See force-placed insurance.
Counseling at origination cost $125–$175. The 2026 claim cap of $1,249,125 (HUD Mortgagee Letter 2025-22) does not pick the servicer. The 24 CFR 206.31 origination cap does not pick it either. A refinance I originate still typically funds in about 30 days after a complete file. A transfer is later, and it is not that close.
Who should not treat a servicing transfer as a scam call and then miss a draw?
This path does not help a household that shreds the hello letter because the company is unfamiliar. I work with multiple lenders. Their subservicers are often national shops. Unfamiliar is normal.
It does not help someone who keeps sending occupancy mail to me after the effective date. I originated. I do not board the loan.
Read the date. Change the clause. Write the new shop. A transfer notice is how servicing stays legal. Ignoring it is how a living HECM starts looking vacant.