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#1803826 - 04/11/13 01:31 PM Small Servicer Exemption
Mel in WA Offline
Gold Star

Registered: 03/05/13
Posts: 324
We service approximately 2500 closed-end, first lien mortgage loans. We also service approximately 1300 open-ended, second liens (HELOCs). Are the HELOCs included in the 5,000 threshold for the small servicer exemption?

Thanks!

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#1803851 - 04/11/13 01:57 PM Re: Small Servicer Exemption [Re: Mel in WA]
GTS333 Offline
100 Club

Registered: 06/04/10
Posts: 113
No, I believe in the preamble to the final rule the CFPB states that the loan threshold for the small servicer exemption for the periodic statement is determined by counting the loans that would be subject to the periodic statement requirements. So, a HELOC would not be included in the total count, as it's not required to get the periodic statement under the final rule.

On a related note, the periodic statement applies to any closed-end consumer credit transaction secured by a dwelling, so lien position doesn't factor into it. Someone please correct me if I'm wrong. smile


Edited by GTS333 (04/11/13 01:58 PM)
_________________________
My opinion, take it for what its worth. Opinions expressed are my own and not those of my employer and are not legal advice.

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#1803962 - 04/11/13 04:06 PM Re: Small Servicer Exemption [Re: GTS333]
Mel in WA Offline
Gold Star

Registered: 03/05/13
Posts: 324
I agree with your comment that lien position isn't a factor. Does it just come down to closed-ended or open-ended??

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#1804016 - 04/11/13 06:22 PM Re: Small Servicer Exemption [Re: Mel in WA]
GTS333 Offline
100 Club

Registered: 06/04/10
Posts: 113
If I'm understanding your question correctly, the answer is no. The periodic statement is required for closed-end, consumer credit transactions, secured by a dwelling. So, all of those elements would need to be true to be applicable. If it was a closed-end loan that was not securing a dwelling, for example, it would not apply.
_________________________
My opinion, take it for what its worth. Opinions expressed are my own and not those of my employer and are not legal advice.

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#1804324 - 04/12/13 01:35 PM Re: Small Servicer Exemption [Re: GTS333]
Mel in WA Offline
Gold Star

Registered: 03/05/13
Posts: 324
Do you know the citing that states HELOCs are not included in the small exemption figure (5,000)? I have to prove this to management.

Thanks!

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#1804378 - 04/12/13 02:48 PM Re: Small Servicer Exemption [Re: Mel in WA]
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30859
Loc: Cape Cod
It's in the opening paragraph of section 1026.41:

(a) In general. (1) Scope. This section applies to a closed-end consumer credit transaction secured by a dwelling, unless an exemption in paragraph (e) of this section applies. Such transactions are referred to as mortgage loans for the purposes of this section.

Then in section 1026.41(e), the small servicer definition is given in terms of servicing "mortgage loans."
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John S Burnett
BankersOnline.com

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