Mortgage Servicing (Overview) Flashcards
What are the primary requirements for record-keeping in mortgage servicing?
Document retention and a servicing file.
What is document retention in mortgage servicing?
Keeping records of actions on a loan until one year after discharge or transfer.
What must be included in a servicing file?
Transaction schedule, lien security document, borrower communication notes, data fields, consumer-provided info.
What is an FHA loan?
A loan insured by the Federal Housing Administration allowing up to 96.5% borrowing.
What is a USDA home loan?
A mortgage loan for rural property owners provided by USDA.
What is a VA-guaranteed home loan?
A loan for veterans with no down payment, flexible interest rates.
What is a fixed-rate loan?
A loan with an interest rate that remains fixed for 15 or 30 years.
What is an adjustable-rate mortgage (ARM)?
A mortgage with variable interest rates that may start with a fixed period.
What is a reverse mortgage?
A financial agreement where a homeowner receives payments by relinquishing home equity.
What is a shared appreciation mortgage (SAM)?
A mortgage where lender receives a share of property value increase as payment.
What is a suspense account?
A temporary account for payments before final allocation.
What is an electronic funds transfer (EFT)?
Money transfer from one account to another without paper.
What is a non-conforming payment?
A non-conforming payment is a loan payment that does not meet the lender’s specified requirements, such as incorrect amounts, missing account details, or failure to follow designated payment methods.
What is a partial payment?
A payment not enough to cover principal, interest, and escrow.
What is a payoff statement?
A statement of loan payoff amount, usually provided within seven days.
What is prompt crediting?
Crediting a payment on the day of receipt for closed-end loans.
What is a periodic payment?
Payment covering principal, interest, and escrow for a billing cycle.
Who qualifies as a small servicer?
Those servicing 5,000 or fewer loans, nonprofit servicers, or Housing Finance Agencies.
What exemptions do small servicers have?
Exemptions from periodic statements, force-placed insurance prohibitions, certain servicing rules.
How long does a small servicer have to comply if they lose their exemption?
Six months or until the next January 1, whichever is later.
What does ARM stand for?
adjustable-rate mortgage
What does SAM stand for?
shared appreciation mortgage
What does EFT stand for?
electronic funds transfer
What is an early intervention requirement?
Requirement for servicers to contact delinquent borrowers early to discuss options to avoid foreclosure.
What are continuity of contact provisions?
Rules requiring consistent point of contact for delinquent borrowers.
When must a servicer start following regular servicing rules if they lose the small servicer exemption?
Within six months or by the next January 1.
What are force-placed insurance provisions?
Rules governing when servicers can place insurance if the borrower fails to maintain coverage.
What is a servicing file?
A collection of documents and records related to the management of a loan, including payment history, correspondence, and other servicing activities.
What is Final Allocation
The process of assigning or distributing funds to their designated accounts or purposes, ensuring all transactions are accurately completed and reconciled at the end of a financial process.
