The prohibition on a servicer moving for judgment or order of sale includes making a dispositive motion for foreclosure judgment, such as a motion for default judgment, judgment on the pleadings, or summary judgment, which may directly result in a judgment of foreclosure or order of sale. See interpretation of 35(b) Scope of error resolution. A servicer, however, may not require that a borrower make the March payment as a condition for complying with its obligations under 1024.35 with respect to the notice of error on the February payment. Any written document, such as a letter or a handwritten note, counts as a QWRbut not if its written on the servicers payment coupon or another payment form. A loss mitigation application shall be considered facially complete when a borrower submits all the missing documents and information as stated in the notice required under paragraph (b)(2)(i)(B) of this section, when no additional information is requested in such notice, or once the servicer is required to provide the borrower a written notice pursuant to paragraph (c)(3)(i) of this section. If the borrower completes the application within this period, the application shall be considered complete as of the date it first became facially complete, for the purposes of paragraphs (d), (e), (f)(2), (g), and (h) of this section, and as of the date the application was actually complete for the purposes of this paragraph (c). Later discovery of additional information required to evaluate application. Even if a servicer offers a borrower a short-term payment forbearance program or a short-term repayment plan based on an evaluation of an incomplete loss mitigation application, the servicer must still comply with all applicable requirements in 1024.41 if the borrower completes a loss mitigation application. For example, the following are not errors for purposes of 1024.35: i. (10) Moving for foreclosure judgment or order of sale, or conducting a foreclosure sale in violation of 1024.41(g) or (j). For example, if the procedural safeguards are met due to an unresponsive borrower determination as described in 1024.41(f)(3)(ii)(C), the servicer must maintain records demonstrating that the servicer did not receive communications from the borrower during the relevant time period and that all four elements of 1024.41(f)(3)(ii)(C) were met. A transferee servicer must, in accordance with 1024.41(b)(1), exercise reasonable diligence to complete a loss mitigation application, including a facially complete application, received as a result of a transfer. in Supplement I. A servicer is not required to designate a specific address that a borrower must use to assert an error. (9) Making the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process in violation of 1024.41(f) or (j). Official interpretation of 41(c)(2)(iii) Short-term loss mitigation options. Assertions of errors regarding substantially all aspects of a mortgage loan, including errors relating to all aspects of mortgage origination, mortgage servicing, and foreclosure, as well as errors relating to the crediting of substantially every borrower payment and escrow account transaction; ii. Except as provided in paragraphs (k)(2) through (4) of this section, if a transferee servicer acquires the servicing of a mortgage loan for which a loss mitigation application is pending as of the transfer date, the transferee servicer must comply with the requirements of this section for that loss mitigation application within the timeframes that were applicable to the transferor servicer based on the date the transferor servicer received the loss mitigation application. The following are examples of notices of error that are overbroad: i. 3. After receipt of a notice of error, a servicer may not, for 60 days, furnish adverse information to any consumer reporting agency regarding any payment that is the subject of the notice of error. The appeal may be evaluated by supervisory personnel that are responsible for oversight of the personnel that conducted the initial evaluation, as long as the supervisory personnel were not directly involved in the initial evaluation of the borrower's complete loss mitigation application. A borrower is deemed to be performing under an agreement on a short sale, or other similar loss mitigation option, during the term of a marketing or listing period. 1024.34 Timely escrow payments and treatment of escrow account balances. (i) In general. 2. Official interpretation of 41(c)(2) Incomplete loss mitigation application evaluation. Foreclosure sale re-scheduled. A borrower calls to ask about loss mitigation options and servicer personnel explain the loss mitigation options available to the borrower and the criteria for determining the borrower's eligibility for any such loss mitigation option. The following examples illustrate situations in which only an inquiry has taken place and no loss mitigation application has been submitted: i. 1024.9 Reproduction of settlement statements. Official interpretation of Paragraph 41(b)(2)(i)(B). At the conclusion of such evaluation, the transferee servicer must permit the borrower to accept the short sale option offered by the transferor servicer, even if the transferee servicer does not offer the short sale option, in addition to any loss mitigation options the transferee servicer determines to offer the borrower based upon its own evaluation. In general. See comment 41(f)-1 for a description of whether a document is considered the first notice or filing under applicable law. i. See interpretation of 41(c)(4)(ii) Effect in case of delay. A servicer has received a communication from the borrower if the communication is from an agent of the borrower. Servicer unable to determine appeal. Servicer discretion. Mortgage Servicing "Notices of Error" - Does The Catch-All Catch It All (3) The borrowers acceptance of an offer made pursuant to paragraph (c)(2)(v)(A) of this section ends any preexisting delinquency on the mortgage loan. A servicer is required to disclose the actual reason or reasons for the denial. Copyright 2020-2022 Mortgage Audits Online. For example, if an escrow account computation year as defined in 1024.17(b) will end during a borrower's short-term repayment plan, the written notice complies with 1024.41(c)(2)(iii) if it identifies the payment amounts that may change, states that those payment amounts are estimates, and states that the affected payments might change because the borrower's escrow payment might change. Near the end of a short-term payment forbearance program offered based on an evaluation of an incomplete loss mitigation application pursuant to 1024.41(c)(2)(iii), and prior to the end of the forbearance period, if the borrower remains delinquent, a servicer must contact the borrower to determine if the borrower wishes to complete the loss mitigation application and proceed with a full loss mitigation evaluation. If the servicer committed another mistake, such as misapplying payments or overcharging fees, it has 30 days to respond after receiving your letter. Consistent with 1024.41(a), because nothing in section 1024.41 should be construed to permit a borrower to enforce the terms of any agreement between a servicer and the owner or assignee of a mortgage loan, including with respect to the evaluation for, or provision of, any loss mitigation option, 1024.41(c)(1) does not require that an evaluation meet any standard other than the discretion of the servicer. A notice establishing an address that a borrower must use to assert an error may be included with a different disclosure, such as a notice of transfer. For example, a servicer may designate an address to receive notices of error for borrowers located in California and a separate address to receive notices of errors for borrowers located in Texas. Promptly after offering a payment forbearance program or a repayment plan under this paragraph (c)(2)(iii), unless the borrower has rejected the offer, the servicer must provide the borrower a written notice stating the specific payment terms and duration of the program or plan, that the servicer offered the program or plan based on an evaluation of an incomplete application, that other loss mitigation options may be available, and that the borrower has the option to submit a complete loss mitigation application to receive an evaluation for all loss mitigation options available to the borrower regardless of whether the borrower accepts the program or plan. The amendments provide significant new rights to homeowners exiting a mortgage loan forbearance or experiencing a payment hardship related to the COVID-19 pandemic. RESPA and Regulation X impose a requirement on servicers to provide notice to consumers of any assignment, sale, or transfer of servicing. 1024.15 Affiliated business arrangements. For example, in such a case, the servicer's provision of the notice of determination of which loss mitigation options, if any, it will offer to the borrower under 1024.41(c)(1)(ii) regarding the borrower's prior complete loss mitigation application does not affect the servicer's obligations to provide a new notice of complete application under 1024.41(c)(3)(i) regarding the borrower's subsequent complete loss mitigation application. Section 1024.41(k)(2)(ii) provides additional protections for borrowers but does not remove any protections. In general and subject to the restrictions described in comments 41(b)(2)(ii)-2 and -3, a servicer complies with the requirement to include a reasonable date in the written notice required under 1024.41(b)(2)(i)(B) by including a date that is 30 days after the date the servicer provides the written notice. 12 USC 2607(b). Official interpretation of Paragraph 35(e)(3)(i)(B). 1 / 29 Flashcards Learn Test Match Created by bayleemccann ABA 2021 Terms in this set (29) Riley's manager had a reasonable basis to believe Ms. Hamilton had failed to maintain hazard insurance and directed Riley to start the force placement procedures. The servicer must acknowledge receipt within five days of receiving a QWR (excluding Saturdays, Sundays, and legal holidays). iii. The exemption in 1024.41(c)(2)(iii) applies to, among other things, short-term repayment plans. However, a servicer evaluates whether a borrower is eligible for any such program consistent with criteria established by an owner or assignee of a mortgage loan. Such a letter may constitute an information request under 1024.36(a) that triggers an obligation by the servicer to provide an annual escrow statement. See interpretation of 35(c) Contact information for borrowers to assert errors. Official interpretation of 41(k)(1)(ii) Transfer date defined. (ii) Provide the borrower with a notice in writing stating the servicer's determination of which loss mitigation options, if any, it will offer to the borrower on behalf of the owner or assignee of the mortgage. Assertions of errors in a form that is not reasonably understandable or is included with voluminous tangential discussion or requests for information, such that a servicer cannot reasonably identify from the notice of error any error for which 1024.35 requires a response. (C) Unresponsive borrower. (1) Appeal process required for loan modification denials. (1) Early correction. The process or processes established by the servicer for receiving notices of error through an online intake method shall be the exclusive online intake process or processes for receiving notices of error. Borrower's representative. See interpretation of 41(c)(2)(ii) Reasonable time. (vi) Certain COVID-19-related loan modification options. RESPA requires a mortgage loan servicer to respond in a timely manner to a borrower's request to correct errors relating to "allocation of payments, final balances for purposes of paying off the loan, or avoiding foreclosure, or other standard servicer's duties." Verified answer. Offer of a non-home retention option. Comment for 1024.33 - Mortgage Servicing Transfers, Comment for 1024.34 - Timely Escrow Payments and Treatment of Escrow Balances, Comment for 1024.35 - Error Resolution Procedures, Comment for 1024.36 - Requests for Information, Comment for 1024.37 - Force-Placed Insurance. 2. Explore guides to help you plan for big financial goals, Subpart A - General Provisions 1024.11024.5, Subpart B - Mortgage Settlement and Escrow Accounts 1024.61024.20, Subpart C - Mortgage Servicing 1024.301024.41, Supplement I to Part 1024 - Official Interpretations. First passed in 1974, the Real Estate Settlement Procedures Act (RESPA) is a federal statute regulated first by the U.S. Department of Housing and Urban Development (HUD) and now by the Consumer Financial Protection Bueau (CFPB) to govern the real estate settlement process by mandating all parties fully inform borrowers about all . Borrower obligation to make payments. (4) That the servicer will complete its evaluation of the borrower for all available loss mitigation options promptly upon receiving the documents or information. Significant period of time. For example: i. Current and historical information about the status of secured financial interests in a property, including ownership transfers, trustees sales records, mortgages, releases, assignments and foreclosure related notices. Any such application is subject to the timeframes for compliance set forth in 1024.41(k). Notice of an exclusive address. A transferee servicer must comply with the applicable requirements of 1024.41 with respect to a loss mitigation application received as a result of a transfer, even if the transferor servicer was not required to comply with 1024.41 with respect to that application (for example, because 1024.41(i) precluded applicability of 1024.41 with respect to the transferor servicer). See interpretation of 41(c)(2)(i) In general. A complete loss mitigation application means an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower. A servicer may provide the written notice at the same time the servicer offers the borrower the program or plan. A servicer that complies with this paragraph (c)(2)(iv) will be deemed to have fulfilled its obligation to provide an accurate notice under paragraph (b)(2)(i)(B) of this section. If the borrower is in a short-term payment forbearance program made available to borrowers experiencing a COVID-19-related hardship, including a payment forbearance program made pursuant to the Coronavirus Economic Stability Act, section 4022 (15 U.S.C. See interpretation of Paragraph 35(e)(3)(i)(B). A servicer's offer of a non-home retention option may be conditional upon receipt of further information not in the borrower's possession and necessary to establish the parameters of a servicer's offer. However, if the borrower fails to perform under a trial loan modification plan offered pursuant to paragraph (c)(2)(vi)(A) of this section or requests further assistance, the servicer must immediately resume reasonable diligence efforts as required under paragraph (b)(1) of this section with regard to any loss mitigation application the borrower submitted prior to the servicers offer of the trial loan modification plan and must provide the borrower with the notice required by paragraph (b)(2)(i)(B) of this section with regard to the most recent loss mitigation application the borrower submitted prior to the servicers offer of the loan modification described in paragraph (c)(2)(vi)(A) of this section, unless the servicer has already provided such notice to the borrower. Section 1024.41(i) provides that a servicer need not comply with 1024.41 for a subsequent loss mitigation application from a borrower where certain conditions are met. Riley sent the required notices timely. The property securing the mortgage loan is abandoned according to the laws of the State or municipality where the property is located when the servicer makes the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process; or. If the borrower's loss mitigation application was incomplete based on the transferor servicer's criteria prior to transfer but is complete based upon the transferee servicer's criteria, the application is considered a pending loss mitigation application complete as of the transfer date for purposes of 1024.41(k)(3). Official interpretation of 41(b)(2)Review of loss mitigation application submission. 1024.14 Prohibition against kickbacks and unearned fees. Servicer Requirements: Providing Information or Correcting the Error After receiving your letter, the servicer must give you the information or fix the mistake by a particular deadline, and give you contact information so that you can get further help. See interpretation of Paragraph 41(b)(2)(i)(B). Such loss mitigation options are available to a borrower. Except as set forth in this section with respect to an assertion of error under paragraph (b)(9) or (10) of this section, nothing in this section shall limit or restrict a lender or servicer from pursuing any remedy it has under applicable law, including initiating foreclosure or proceeding with a foreclosure sale. A transfer does not affect a borrower's ability to accept or reject a loss mitigation option offered under paragraph (c) or (h) of this section. A servicer may designate multiple office addresses for receiving notices of errors. 2. (ii) Overbroad notice of error. Section 1024.41(c)(4)(i) requires a servicer to act with reasonable diligence to obtain documents or information not in the borrower's control, which includes information in the servicer's control, that the servicer requires to determine which loss mitigation options, if any, it will offer to the borrower. If a borrower submits a complete loss mitigation application during the pre-foreclosure review period set forth in paragraph (f)(1) of this section or before a servicer has made the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process, a servicer shall not make the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process unless: (i) The servicer has sent the borrower a notice pursuant to paragraph (c)(1)(ii) of this section that the borrower is not eligible for any loss mitigation option and the appeal process in paragraph (h) of this section is not applicable, the borrower has not requested an appeal within the applicable time period for requesting an appeal, or the borrower's appeal has been denied; (ii) The borrower rejects all loss mitigation options offered by the servicer; or. (i) Timing of compliance. A servicer is not required to comply with paragraphs (d) and (e) of this section if the servicer corrects the error or errors asserted by the borrower and notifies the borrower of that correction in writing within five days (excluding legal public holidays, Saturdays, and Sundays) of receiving the notice of error. Official interpretation of 35(e)(3)(ii) Extension of time limit. A servicer may treat a notice of error that alleges multiple errors as separate notices of error and may extend the time period for responding to each asserted error for which an extension is permissible under 1024.35(e)(3)(ii). What's a Qualified Written Request and How Can It Help Me? - Upsolve Read More. The Real Estate Settlement Procedures Act permits the borrower to demand that a mortgage servicer cancel or postpone a foreclosure sale when the servicer has initiated the foreclosure while still evaluating the borrower for loss mitigation options or during the 120-day A servicer is not required to comply with the requirements of paragraphs (d), (e), and (i) of this section if the servicer reasonably determines that any of the following apply: See interpretation of 35(g)(1) In general. . If the servicer notifies you of the extension within 30 days and explains the delay, you can give it another 15 business days to respond. A borrower may provide an acceptance or rejection of a pending loss mitigation offer to a transferor servicer after the transfer date. For asserted errors governed by the time limit set forth in paragraph (e)(3)(i)(C) of this section, a servicer may extend the time period for responding by an additional 15 days (excluding legal public holidays, Saturdays, and Sundays) if, before the end of the 30-day period, the servicer notifies the borrower of the extension and the reasons for the extension in writing. Comment for 1024.38 - General servicing policies, procedures, and requirements. A reasonable date for purposes of 1024.41(b)(2)(ii) must never be less than seven days from the date on which the servicer provides the written notice pursuant to 1024.41(b)(2)(i)(B). A servicer shall not make the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process unless: (i) A borrower's mortgage loan obligation is more than 120 days delinquent; (ii) The foreclosure is based on a borrower's violation of a due-on-sale clause; or. It requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent and timely disclosures about the nature and costs of the real estate settlement process. However, an error relating to the failure to transfer accurately and timely information relating to the servicing of a borrower's mortgage loan account to a transferee servicer is an error for purposes of 1024.35. A servicer is not required to determine or disclose whether a borrower would have been denied on the basis of additional criteria if such criteria were not actually considered. Seven-day minimum. in Supplement I. If the borrower remains in compliance with the short-term payment forbearance program or short-term repayment plan, and the borrower does not request further assistance, the servicer may suspend reasonable diligence efforts until near the end of the payment forbearance program or repayment plan. Reasonable diligence for purposes of 1024.41(b)(1) includes, without limitation, the following actions: i. A loss mitigation application is complete when a borrower provides all information required from the borrower notwithstanding that additional information may be required by a servicer that is not in the control of a borrower. iii. Official interpretation of Paragraph 35(g)(1)(ii). 2601, et seq.) (1) In general. See interpretation of 41(k)(3) Complete loss mitigation applications pending at transfer. Section 1024.41(c)(2)(iii) allows a servicer to offer a borrower a short-term payment forbearance program or a short-term repayment plan based on an evaluation of an incomplete loss mitigation application. An appeal shall be reviewed by different personnel than those responsible for evaluating the borrower's complete loss mitigation application. Real Estate Settlement Procedures Act (RESPA) (CFPB) Official interpretation of 41(c)(2)(iv) Facially complete application. If the servicer receives your notification of error more than seven days before the foreclosure auction, it must remedy the issue before proceeding with the foreclosure sale. A servicer services mortgage loans for two different owners or assignees of mortgage loans. A servicer shall provide to the borrower, at no charge, copies of documents and information relied upon by the servicer in making its determination that no error occurred within 15 days (excluding legal public holidays, Saturdays, and Sundays) of receiving the borrower's request for such documents. (ii) Extension of time limit. PDF Real Estate Settlement Procedures Act FAQs The servicer must mail/deliver an initial written notice to the borrower at least 45 days before assessing a charge or fee related to force-placed insurance (similar to flood) A transferee servicer is not required to provide notices under 1024.41 with respect to a particular loss mitigation application that the transferor servicer provided prior to the transfer. An application that was facially complete under 1024.41(c)(2)(iv) with respect to the transferor servicer remains facially complete under 1024.41(c)(2)(iv) with respect to the transferee servicer as of the date it was facially complete with respect to the transferor servicer. Section 1024.41(c)(4)(ii)(A)(2) does not require a servicer to deny a complete loss mitigation application and permits a servicer to offer a borrower a loss mitigation option, even if the servicer does not obtain the requested documents or information. Nothing in 1024.41(c)(2)(i) prohibits a servicer from offering loss mitigation options to a borrower who has not submitted a loss mitigation application. Obtaining loss mitigation documents and information. Official interpretation of 41(c)(1) Complete loss mitigation application. in Supplement I. Generally, a servicer acts promptly to provide the written notice required by 1024.41(c)(2)(iii) if the servicer provides such written notice no later than five days (excluding legal public holidays, Saturdays, and Sundays) after offering the borrower a short-term payment forbearance program or short-term repayment plan. A default property management fee for borrowers that are not in a delinquency status that would justify the charge; or. (7) Failure to provide accurate information to a borrower regarding loss mitigation options and foreclosure, as required by 1024.39. 4. The notice required pursuant to paragraph (b)(2)(i)(B) of this section must include a reasonable date by which the borrower should submit the documents and information necessary to make the loss mitigation application complete. A transferee servicer that must provide the notice required by paragraph (b)(2)(i)(B) of this section under this paragraph (k)(2): 1. The Real Estate Settlement Procedures Act of 1974 (RESPA) (12 U.S.C. in Supplement I. (C) For all other asserted errors, not later than 30 days (excluding legal public holidays, Saturdays, and Sundays) after the servicer receives the applicable notice of error. Such heightened efforts include, for example, promptly verifying that it has contacted the appropriate party and determining whether it should obtain the required documents or information from a different party. See interpretation of 41(k)(1)(i) Timing of compliance. The date by which any document or information submitted by a borrower will be considered stale or invalid pursuant to any requirements applicable to any loss mitigation option available to the borrower; ii. (2) Failure to apply an accepted payment to principal, interest, escrow, or other charges under the terms of the mortgage loan and applicable law. Section 1024.35 (a) requires servicers to reply to a written notice from the borrower that claims there is an error on the borrower's account. If the borrower subsequently completes the application on March 21, the servicer must provide another notice in accordance with 1024.41(c)(3)(i) and disclose March 21 as the date the servicer received the complete application. in Supplement I. (g) Prohibition on foreclosure sale. If such documents provide for escrow accounts up to the RESPA limits, then the servicer may require the maximum amounts consistent with this section, unless an applicable Federal or State law sets a lesser amount. You have decided to respond by sending the stockholder the best information available to you. The date that is the 120th day of the borrower's delinquency; iii. Call or request a free consulation today! For purposes of paragraphs (e) through (h) of this section, the transferee servicer must treat such a pending complete loss mitigation application as facially complete under paragraph (c)(2)(iv) as of the date it was first facially complete or complete, as applicable, with respect to the transferor servicer. Even if a servicer has informed a borrower that an application is complete (or notified the borrower of specific information necessary to complete an incomplete application), if the servicer determines, in the course of evaluating the loss mitigation application submitted by the borrower, that additional information or a corrected version of a previously submitted document is required, the servicer must promptly request the additional information or corrected document from the borrower pursuant to the reasonable diligence obligation in 1024.41(b)(1). needs of our clients. A servicer offers a borrower a short-term payment forbearance program or a short-term repayment plan based on an evaluation of an incomplete loss mitigation application and provides the borrower the written notice pursuant to 1024.41(c)(2)(iii). 4. Official interpretation of 41(c)(3) Notice of complete application. Any such evaluation and offer is not subject to the requirements of this section and shall not constitute an evaluation of a single complete loss mitigation application for purposes of paragraph (i) of this section. Section 1024.41(k)(2)(ii)(A) prohibits a servicer from making the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process until a date that is after the reasonable date disclosed to the borrower pursuant to 1024.41(b)(2)(ii), notwithstanding 1024.41(f)(1). See comment 41(c)(3)(i)-3. A transferee servicer may be unable to make a determination on an appeal when, for example, the transferor servicer denied a borrower for a loan modification option that the transferee servicer does not offer or when the transferee servicer receives the mortgage loan through an involuntary transfer and the transferor servicer failed to maintain proper records such that the transferee servicer lacks sufficient information to review the appeal.
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