Hello Letter

Hello letter is the formal notice sent by the incoming loan servicer to the borrower after a servicing transfer, introducing the new servicer and providing updated payment instructions, contact information, and account details. Required under RESPA (Regulation X, 12 CFR 1024.33), the hello letter must be sent no later than 15 days after the effective date of the transfer. It is the counterpart to the goodbye letter sent by the outgoing servicer, and together these two notices form the legally required borrower notification whenever loan servicing changes hands.

RESPA Timing and Requirements

Federal law is specific about when and how the hello letter must be delivered:

• Deadline — The incoming servicer must send the notice no later than 15 days after the transfer effective date. There is no requirement to send it before the transfer, though some servicers do.
• Combined notice option — The incoming and outgoing servicers may issue a single combined notice in place of separate hello and goodbye letters, provided it meets all content requirements for both and arrives within the required windows.
• 60-day safe harbor — For 60 days after the transfer date, the borrower is protected from late fees if they accidentally send payment to the old servicer. The hello letter should reference this protection.

What a Hello Letter Should Include

The hello letter must provide the borrower with everything they need to continue making payments without interruption:

Why the Hello Letter Matters to Note Investors

For note investors, the hello letter is more than a compliance checkbox — it is the first impression your servicer makes on the borrower and can directly influence the outcome of your investment.

• Sets the tone on non-performing loans. On a non-performing loan, the borrower may not have communicated with the prior servicer in months or even years. The hello letter is often the first sign that someone new is involved, and it opens the door for loss mitigation conversations. A clear, professional letter from a legitimate servicer signals that the loan is being actively managed.
• Prevents payment disruption on performing loans. On a performing loan, the hello letter is critical for ensuring the borrower knows where to send their next payment. Any gap in communication can turn a paying borrower into a confused one, which risks turning a performing note into a delinquent one.
• Confirms loan boarding accuracy. The hello letter is generated from the data your servicer loaded during loan boarding. If the letter contains incorrect information — wrong payment amount, wrong balance, wrong escrow status — that error is a red flag that the boarding data needs to be corrected before it causes bigger problems.
• Creates a compliance record. Documenting that the hello letter was sent on time and with accurate content protects you in the event of a borrower complaint or regulatory inquiry. Keep a copy in the loan file.

Practical Tips for Note Investors

When you acquire a loan and transfer servicing, do not assume the hello letter will take care of itself. Follow these steps:

1. Confirm the timeline with your servicer. Ask when the hello letter will be mailed and verify that it falls within the 15-day RESPA window after the transfer date.
2. Review a copy before it goes out. Most servicers will provide a draft or sample. Check the payment amount, account number, mailing address, and escrow status for accuracy.
3. Coordinate with the goodbye letter. Make sure the outgoing servicer's goodbye letter and your servicer's hello letter tell a consistent story — same transfer date, same new servicer name, no conflicting instructions.
4. Follow up on non-performing loans. The hello letter alone may not be enough to engage a long-delinquent borrower. Work with your servicer on a broader outreach strategy, but make sure the hello letter goes out first — it establishes your legal standing and opens formal communication.