Investing in notes through your Individual Retirement Account (IRA) offers a powerful avenue for diversifying your portfolio and securing your financial future. However, navigating the process of changing servicers can sometimes seem daunting. At Note Servicing Center Inc. (NSC), we’re committed to ensuring a smooth transition for IRA investors seeking to change their servicer. Here’s a step-by-step guide to help you streamline the process:

  1. Confirmation of Servicer Authority: NSC initiates the process by confirming with your existing servicer that they have the authority to transfer servicing rights to NSC.
  2. Notification to Custodian/Administrator: You, the investor, reach out to your custodian or administrator to inform them of the upcoming change in servicer. Provide them with information about NSC to facilitate the transition.
  3. Custodian Authorization: Upon receiving your notification, your custodian or administrator notifies NSC, authorizing us to service your note. They also instruct NSC to complete and sign the necessary authorization documents, which are then returned.
  4. Documentation and Setup: NSC sends the authorization to service and other required forms to your custodian for completion and return. Additionally, NSC requests a copy of the note and the setup fee, which can be transferred from your current servicer if applicable.
  5. Balance Transfer: Your current servicer provides NSC with a completed spreadsheet detailing balances and other relevant information.
  6. Commencement Date Determination: Your old servicer determines the date when NSC will officially begin servicing your note.
  7. Borrower Notification: Your old servicer notifies borrowers that they are no longer servicing the note, providing them with a “Notice of Transfer” as a farewell.
  8. Escrow Funds Transfer: Any funds held in reserve in escrow belonging to the borrower are sent by your old servicer to NSC.
  9. Servicing Setup and Borrower Notification: NSC sets up servicing for your note and sends a “Notice of Transfer of Servicer” to the borrower. This notice includes instructions on where to send payments, along with a welcome letter, directions, and payment options.
  10. Funds Collection and Distribution: NSC collects payments from the borrower and sends them to your custodian, designated as “For Benefit Of” (FBO) the investor. NSC deducts the servicing fee before forwarding the funds. Please note that NSC can only send funds by check to the custodian, as the ACH program does not currently support direct transmission into individual investors’ accounts.

By following these steps, you can ensure a seamless transition in changing your note servicer, allowing you to focus on maximizing your IRA investments with confidence. Should you have any questions or require further assistance, feel free to reach out to our team at NSC. We’re here to support you every step of the way.

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