Servicing Requirements Flashcards
What kind of servicers are exempt from servicing requirement rules?
Small servicers
What is a small servicer?
A servicer that:
- Services, along with any affiliates, 5,000 or fewer mortgage loans of which the servicer is the creditor or assignee,
- Is a housing finance agency, or
- Is a nonprofit entity that services 5,000 or fewer mortgage loans for which the servicer (i.e., the nonprofit) is the creditor
If a servicer receives a written complaint asserting errors or requesting mor info how many days do they have to acknoeldge receipt?
5 Days
If a servicer needs to reslove the error or determine there was no error how long do they have to do so?
30 days and additional 15 days with notice to the borrower
If a servicer needs to complete an information request or inform the borrower the information is not available, how long do they have?
30 days and additional 15 days with notice to the borrower
How long does a servicer have to respond to a request related to the identity or contact information of the owner of the borrower’s mortgage loan?
10 days
What is Force-placed insurance?
Force-placed insurance is hazard insurance coverage purchased by the servicer when a borrower fails to maintain the proper coverage.
What must a servicer have before charging a borrower a premium for a force-placed policy?
A servicer must have a reasonable basis upon which to believe the consumer’s insurance has lapsed.
What must a servicer do before charging a borrower a premium for a force-placed policy?
- At least 45 days prior to making such a charge, send notice to the consumer regarding the issue indicating that:
- The borrower’s hazard insurance has expired
- Maintenance of hazard insurance is a requirement of the loan, and
- Any insurance placed by the servicer may be more costly than insurance which could be obtained by the borrower - At least 15 days prior to making such a charge, send a reminder that an assessment for hazard insurance will be made unless the consumer provides proof of insurance
What must a servicer do if the borrower sends evidence of insurance?
A servicer must cancel any force-placed insurance within 15 days of receiving evidence of insurance from the borrower and refund any premiums charged for overlapping insurance
True or False: Servicers must provide a statement to borrowers during each billing cycle.
True, but small servicers are exempt from this requirement?
When must the statements be mailed?
The statements must generally be mailed within a reasonably prompt time after the payment due date or at the end of any courtesy period provided for the previous billing cycle.
What must the billing statement contain?
- The amount due
- The payment due date
- The amount of any late fee and the date on which it will be imposed
- The monthly payment and a breakdown of the amount of the payment goings towards principal, interest, and any escrow-required payments
- The amount of any payment past due
- An itemization of transaction activities over the past payment period
- Account information (i.e., outstanding principal, interest rate)
- Partial payment information
True or False: A creditor must disclose its partial payment policy on the closing disclosure?
True
What must the closing disclosure say regarding it’s partial payment policy?
- Whether the creditor accepts partial payments
- If the creditor accepts partial payments, that the creditor may hold those partial payments in a suspense account until the full periodic payment is received
- If the creditor does not accept partial payments, that fact
- The fact that if the loan is sold, the new creditor may have a different policy
What must a servicer do in regards to a delinquent borrower?
A servicer must make good faith efforts to establish live contact with a delinquent borrower
How many days does a servicer have to establish live contact with a delinquent borrower?
36 days
What should a written notice of delinquency include?
- A statement encouraging the borrower to contact the servicer
- Contact information for servicer personnel to contact with regards to the -delinquency
- A brief description of loss mitigation options that might be available
- A statement with instructions on how to obtain more information about loss mitigation options, and
- The web address for the CFPB or HUD where the borrower might find a list of homeownership counselors
How many days does a servicer have to deliver a written notice of delinquency?
The servicer must provide written notification to the delinquent borrower by the 45th day of delinquency.
What does ARM stand for?
Adjustable Rate Mortgage
A written notice must be provided from the servicer to the borrower between how many days prior to the first adjustment?
For the first adjustment, a written notice must be provided between 210 and 240 days prior to the adjustment.
A written notice must be provided from the servicer to the borrower between how many days prior any ongoing adjustments?
For ongoing adjustments, the notice must be given between 60 and 120 days prior to the first payment at the new rate.
What is a periodic payment?
A periodic payment is an amount sufficient to cover principal, interest, and escrow, if applicable, for any given billing cycle
When must periodic payments be credited?
Periodic payments must be credited as of the day of receipt.
What is a payoff statement?
A payoff statement is a statement prepared by a lender providing a payoff amount for prepayment on a mortgage or other loan. A payoff statement or a mortgage payoff letter will typically show the balance you must pay in order to close your loan.
When must a servicer provide a payoff statement?
Payoff statements must be provided within seven business days after receipt of a written request from the borrower
