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InfoSight Highlight: Loansā€”Mortgage Servicing
Friday, August 25, 2017 6:55 AM

The Mortgage Servicing Rules published by the Consumer Financial Protection Bureau are based on the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). The Dodd-Frank Act amended the Real Estate Settlement Procedures Act (RESPA) of 1974, which is implemented by Regulation X, and the Truth in Lending Act (TILA), which is implemented by Regulation Z, with regard to the servicing of certain residential mortgage loans.

What loans will the Mortgage Servicing Rule apply to?
Generally the Mortgage Servicing Rules apply to closed-end consumer credit transactions that are secured by a dwelling that the credit union services.

Are there exemptions to the rule?
Small servicers are exempt from certain parts of the rule; however, if you service mortgage loans, parts of the rule apply to all servicers regardless of size. Your credit union qualifies as a small servicer if the credit union, together with any affiliates, services 5,000 or fewer mortgage loans and is the servicer for all of them.

If the credit union services any mortgage loan it (or an affiliate) did not originate or does not own, the credit union does not qualify as a small servicer, even if it services 5,000 or fewer loans overall.

Requirement for policies and procedures
The credit union should establish policies and procedures designed to achieve the following objectives in regard to mortgage loan servicing:

  • Access and provide timely and accurate information;
  • Properly evaluate loss mitigation applications;
  • Facilitate oversight of, and compliance by, service providers;
  • Promptly facilitate transfer of information during servicing transfers;
  • Inform members of the written error resolution and information request procedures; and
  • Set standards for record retention and service file creation.

Effective on April 19, 2018, the credit union will also need to include the following within their policies and procedures:

Promptly facilitate communication with potential and confirmed successors in interest and confirm a successor in interest’s identity and ownership interest.

Source: InfoSight Compliance

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