Professional Documents
Culture Documents
Servicing Overview and Recent Regulatory Developments: Krista Cooley K&L Gates LLP 202-778-9257
Servicing Overview and Recent Regulatory Developments: Krista Cooley K&L Gates LLP 202-778-9257
Servicing Overview
Summary of Servicing Functions Loan Transfers and Account Establishment Billing and Payment Processing Escrow Administration Borrower Communication
Customer Service
Handling inquiries
Resolving complaints
Servicing Overview
Summary of Servicing Functions Delinquent Servicing
Collections and Borrower Outreach Loss Mitigation Retention and Disposition
Repayment plans, forbearance agreements, loan
Foreclosure Management Real Estate Management Property Preservation and Protection Investor Reporting
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Servicing Overview
Mortgage servicers are accountable to multiple parties, including: Borrowers Federal Regulators
CFPB, DOJ, Treasury, OCC, HUD, VA, USDA RHS
Servicing Overview
Federal Regulation of Servicing Activities TILA Truth in Lending Act FCRA Fair Credit Reporting Act RESPA Real Estate Settlement Procedures Act FDCPA Fair Debt Collection Practices Act ECOA Equal Credit Opportunity Act EFTA Electronic Funds Transfer Act GLBA Gramm-Leach-Bliley Act HOPA Homeowners Protection Act National Flood Insurance Act Fair Housing Act GSE Guidelines HUD/VA/RHS Guidelines for Insured Loans
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Servicing Overview
State Regulation of Servicing Licensing and approvals Servicing Fees Disclosures/Notices Collection Activity Vacant Property Registration Property Preservation Foreclosure Mediation
once post referral to foreclosure, with some exceptions Timelines for sending based on delinquency and the borrowers response Letter may be customized, but must include all elements of Fannie Mae Forms 731 and 761 and be available to Fannie Mae for review upon request
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Currently occupied primary residence securing the loan First lien loan originated on or before January 1, 2009 Unpaid principal balance no more than $729,750 for one-unit property Total monthly mortgage payment exceeds 31% of gross monthly income Borrower experiencing financial hardship without sufficient liquid assets
Servicer must conduct a Net Present Value (NPV test) determines whether a modification at the affordable payment is more valuable to the mortgage holder than going through foreclosure Borrowers must complete a three-month trial payment period Currently set to expire on December 31, 2012
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Loan secured by borrowers primary residence Borrower must qualify and agree to the VA HAMP modification before Treasurys HAMP expiration date No restriction on loans originated before January 1, 2009
3. RD-HAMP RD-HAMP requires lenders to satisfy all independent RHS guidance related to special loan servicing as well as requirements specific to RD-HAMP. Servicers must therefore be familiar with RHS guidance and Treasury guidance specific to the RD-HAMP program.
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Michigan Recently extended the sunset date for the mortgage loan modification negotiation program
Party may not commence foreclosure proceedings until the mortgagor has received notice of the availability of and had an opportunity to participate in the states mortgage loan modification negotiation program
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SCRA Compliance
Servicemembers Civil Relief Act, 50 U.S.C. app. 501 et seq. Federal statute that provides certain protections to:
Members of the Army, Navy, Air Force, Marine Corps and Coast Guard on active duty Members of the National Guard who are called to active duty for over 30 consecutive days to respond to a Presidentiallydeclared national emergency Commissioned members of the Public Health Service and the National Oceanographic and Atmospheric Administration (NOAA) Dependents of servicemembers also are eligible for relief under some provisions
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Recommendations
1. Emphasis on policies, procedures, and practices 2. Internal Controls
Questions?
Krista Cooley
202-778-9257 krista.cooley@klgates.com
K&L Gates LLP 1601 K Street, NW Washington, DC 20006 www.klgates.com
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