Update a Mortgagee Clause After a Servicing Transfer

When servicing transfers, the new servicer's clause should replace the old one on the policy. Use the RESPA transfer notice or the borrower's latest statement to confirm who the new servicer is. Get the new servicer's insurance clause and mailing address, then ask the insurer for a mortgagee change endorsement and send updated proof of coverage to the new servicer.

Servicing transfers are routine, and they cause a lot of insurance paperwork problems. Renewal bills go to a company that no longer services the loan. Claim checks name the old servicer. Force-placed insurance letters reach homeowners who are fully insured. This guide explains what the transfer rules require, how to identify the right servicer, and how agents, CSRs, homeowners, and loan teams can update the clause without gaps.

Loan sale vs. servicing transfer: what's the difference?

• Owner (investor): the entity that holds the loan, such as a bank, Fannie Mae, Freddie Mac, or a private investor.
• Servicer: the company that collects payments, manages escrow, and tracks insurance. The CFPB notes that it's common for a different company to take over servicing after closing.

These can change independently. The mortgagee clause normally names the servicer. Fannie Mae's Selling Guide requires the servicer's name, "its successors and/or assigns," and mailing address when the lender isn't the servicer, and it tells insurers to send correspondence, policies, and bills to the servicer. A change of owner alone often requires no clause update. A change of servicer usually does.

What notices does the borrower receive?

The RESPA servicing transfer notice ("goodbye/hello letter")

Under 12 CFR 1024.33:

• The old (transferor) servicer must send notice at least 15 days before the transfer's effective date.
• The new (transferee) servicer must send notice no more than 15 days after the effective date.
• They can send one combined notice at least 15 days before the effective date. Notices given at settlement also satisfy the timing rule.
• In certain cases, such as servicer bankruptcy, termination for cause, or FDIC or NCUA proceedings, notice may come up to 30 days after the effective date.

The notice must include the effective date, contact details for both servicers, and the date the old servicer stops accepting payments and the new one starts. It also has to say whether optional insurance, such as mortgage life or disability, is affected. It does not have to include the new servicer's *property insurance* clause. That's why agents still need to look the clause up.

The 60-day payment grace period

For 60 days after the effective date, a payment the old servicer receives on time can't be treated as late. The old servicer must forward it or return it. This protects mortgage payments, but it doesn't redirect insurance documents.

The new-owner notice

When the *owner* changes, Regulation Z (12 CFR 1026.39) requires the new owner to send a disclosure within 30 calendar days of the transfer.

Doesn't ISAOA already cover a transfer?

Partly. "Its successors and/or assigns" means the new servicer still has rights under the policy (see ISAOA/ATIMA explained). But insurers mail notices, bills, and loss drafts to the name and address on file. That's why Fannie Mae's Servicing Guide F-1-11 requires the transferor or transferee servicer to ask property, flood, and earthquake insurers for an endorsement that substitutes the transferee servicer in the mortgagee clause. The premium billing address also changes to the transferee, unless the borrower pays directly.

In practice, servicers don't always reach every carrier in time. A quick check by the agent or homeowner prevents most problems.

Step by step: updating the clause after a transfer

1. Confirm the new servicer. Use the transfer notice, the first statement from the new servicer, or the servicer's website. If the borrower has neither, see the MERS section below or our homeowner guide to finding who services a mortgage.
2. Confirm the effective date. Notices and bills dated after that date should go to the new servicer.
3. Get the new servicer's insurance clause. You need the mortgagee name as it should appear, the ISAOA/ATIMA wording, and the address for *insurance documents*. That address is often different from the payment address.
4. Get the loan number. The new servicer may assign a new loan number. Use the one on its notice or statement.
5. Request the mortgagee change endorsement from the carrier, replacing the old servicer rather than adding a second mortgagee.
6. Update escrow billing. If premiums are escrowed, make sure the next renewal bill goes to the new servicer.
7. Send proof of insurance to the new servicer through its insurance verification portal or insurance address. See understanding verification portals.
8. Keep records of what you sent, where, and when, in case a lender-placed insurance letter arrives later.

Using MERS ServicerID to find the current servicer

MERS ServicerID at mers-servicerid.org identifies the servicer for loans registered on the MERS System. You can search by:

• the 18-digit Mortgage Identification Number (MIN);
• property address and borrower details; or
• FHA, VA, or MI certificate number.

The CFPB also points borrowers to MERS by phone at (888) 679-6377. Not every loan is registered with MERS, so a "not found" result doesn't mean the loan has no servicer.

Never list MERS as the mortgagee. Fannie Mae's Selling Guide says that when MERS is the original mortgagee of record, MERS must not be named as mortgagee or loss payee on a property policy. The clause must name the servicer.

Who should do what during a transfer?

Common transfer mistakes

• Using the new servicer's payment address as the insurance address.
• Adding the new servicer as a second mortgagee instead of replacing the old one.
• Listing MERS or the investor, such as Fannie Mae, when the guide says to name the servicer.
• Changing the clause but leaving escrow billing pointed at the old servicer.
• Assuming the servicer updated the carrier without checking.

How MortgageeClauses.com helps

Every transfer has the same bottleneck: getting the *new* servicer's correct insurance clause quickly. Search the servicer at MortgageeClauses.com to see the clause wording and insurance mailing address. Each listing shows whether the record is Verified against a primary source or Pending Verification, plus servicer phone, fax, email, the insurance verification portal link, and known aliases and successor or related lenders. That helps when a servicer has been renamed or acquired. Learn how to find any clause in 10 seconds, or start a 30-day trial, no card required.

Key takeaways

• The mortgagee clause normally names the servicer, so servicing transfers usually require an update. Owner changes often don't.
• RESPA requires transfer notices 15 days before (old servicer) and within 15 days after (new servicer) the effective date.
• ISAOA preserves rights, but it doesn't redirect mail. Request a mortgagee change endorsement.
• Use the new servicer's insurance address and its loan number, and update escrow billing.
• MERS ServicerID can identify the servicer for MERS-registered loans. Never name MERS as mortgagee.