No, we are not aware of a requirement under Illinois law for a mortgage servicer to send a “Hazard Insurance Endorsement Letter” or other notice to an insurance company when a bank transfers servicing of a mortgage loan to another servicer.

Although Regulation X references the possibility that state law may require notice of a change in servicing to an insurance company, the Illinois Banking Act requires only that notice be sent to mortgagors. However, you may wish to review the insurance policy to determine if its terms require notice of a change in servicing.

Additionally, we note that the Residential Mortgage License Act of 1987’s administrative rules require licensees who transfer servicing on a residential mortgage loan to provide the insurance carrier with a notice of transfer when servicing includes the payment of hazard insurance premiums, but this law and its administrative rules do not apply to banks.

For resources related to our guidance, please see:

• Regulation X, 12 CFR 1024.33(d) (“Preemption of State laws. A lender who makes a mortgage loan or a servicer shall be considered to have complied with the provisions of any State law or regulation requiring notice to a borrower at the time of application for a loan or transfer of servicing of a loan if the lender or servicer complies with the requirements of this section. Any State law requiring notice to the borrower at the time of application or at the time of transfer of servicing of the loan is preempted, and there shall be no additional borrower disclosure requirements. Provisions of State law, such as those requiring additional notices to insurance companies or taxing authorities, are not preempted by section 6 of RESPA or this section, and this additional information may be added to a notice provided under this section, if permitted under State law.”)

• Illinois Banking Act, 205 ILCs 5/48.2(e) (“Any bank, affiliate or subsidiary of such bank which shall engage in making residential mortgage financing transactions, shall with respect to each such transaction, provide the following: . . . (2) if the servicing of a residential mortgage shall be transferred from the original mortgagee, within 45 days of such transfer, written notice sent by certified mail, return receipt requested, to the mortgagor at the address of the property, unless the mortgagor shall have directed correspondence from the mortgagee shall be sent to another address, which notice shall set forth: the name and address of the transferee; the name, address and telephone number to which inquiries by the residential mortgagor should be addressed; and the name and address to which the next 3 monthly installments are to be submitted to the transferee and the amount of each of such monthly installment.”)

• Illinois Administrative Code, Residential Mortgage License Act of 1987, 38 Ill. Adm. Code 1050.820 (“Responsibilities of a licensee who transfers or sells servicing on a residential mortgage loan shall [include]: 1) Promptly providing the insurance carrier or agent with a notice of transfer identifying both the policy number and loan number when servicing includes payment of hazard insurance premiums . . .”)

• Residential Mortgage License Act of 1987, 205 ILCS 635/1-4(d) (An “exempt person or entity” includes “any bank . . . savings bank, or credit union.”)