Pertaining to the loss mitigation procedures.

If I understand correctly, section 1024.41(f)(1) says a bank cannot take foreclosure steps until the borrower is at least 120 days delinquent on their loan.

Please explain to me what section 1024.41(f)(2) means.

If the borrower applies for loss mitigation relief before he/she is 120 days delinquent or before the servicer has filed the first notice in a foreclosure procedure, the servicer can't start a foreclosure while the loss mitigation process is underway. It's designed to prohibit the alleged "dual tracking" that some borrowers claim to have experienced. In "dual tracking," the servicer was both considering a loss mitigation request and pushing the loan into foreclosure at the same time.

Thank you. That made it clear.

Some of the changes to all these new rules only apply to applications received after the rule becomes effective.

Does this 120 days delinquent requirement only apply to applications after the effective date?

Just anticipating a question from manamgement. I think it is best to just to apply this to all mortgage loans in the portfolio

With respect to the effective dates only:

The Reg X mortgage servicing rule amendments apply beginning January 10, 2014, to all mortgage loans that are being serviced. There is one minor exception: A servicer is not required to comply with § 1024.38(c)(2) -- the servicing file standards -- with respect to information created prior to January 10, 2014. [See Comment 38(c)(2)-1]

The Reg Z mortgage servicing rule amendments also apply beginning January 10, 2014, to all mortgage loans that are being serviced. There is a grandfathering exception for ARM loans with index look-back periods of less than 45 days that are originated before January 10, 2015.

The ARM initial notice requirements apply to all existing accounts. There are specific comments about that in the preamble material. See the bottom of page 152 - top of page 153 of the 01/17/13 (pre-federal-register) document.