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#1091408 - 12/03/08 10:14 PM
Servicing Disclosure Revision
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Gold Star
Joined: May 2005
Posts: 316
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I read in an article from Wolters Kluwer that the revisions to the Servicing Disclosure are effective January 16, 2009. I'm trying to find an example of the revisions or what they are and i'm not having any luck. Can anyone direct me to where i can find the revised form? Thanks
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#1091428 - 12/03/08 10:38 PM
Re: Servicing Disclosure Revision
Web
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Member
Joined: Aug 2005
Posts: 51
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HereAppendix MS-1 to Part 3500
[Sample language; use business stationery or similar heading] [Date]
SERVICING DISCLOSURE STATEMENT NOTICE TO FIRST LIEN MORTGAGE LOAN APPLICANTS: THE RIGHT TO COLLECT YOUR MORTGAGE LOAN PAYMENTS MAY BE TRANSFERRED
You are applying for a mortgage loan covered by the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2601 et seq.). RESPA gives you certain rights under Federal law. This statement describes whether the servicing for this loan may be transferred to a different loan servicer. ``Servicing'' refers to collecting your principal, interest, and escrow payments, if any, as well as sending any monthly or annual statements, tracking account balances, and handling other aspects of your loan. You will be given advance notice before a transfer occurs.
Servicing Transfer Information
[We may assign, sell, or transfer the servicing of your loan while the loan is outstanding.] [or] [We do not service mortgage loans of the type for which you applied. We intend to assign, sell, or transfer the servicing of your mortgage loan before the first payment is due.] [or] [The loan for which you have applied will be serviced at this financial institution and we do not intend to sell, transfer, or assign the servicing of the loan.] [INSTRUCTIONS TO PREPARER: Insert the date and select the appropriate language under ``Servicing Transfer Information.'' The model format may be annotated with further information that clarifies or enhances the model language.]
Dated: November 7, 2008. Brian D. Montgomery, Assistant Secretary for Housing--Federal Housing Commissioner. you go. Comes from the Federal Register notice:
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#1091604 - 12/04/08 01:18 PM
Re: Servicing Disclosure Revision
Kraj
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Power Poster
Joined: Nov 2006
Posts: 3,255
Tiger's Den!
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We currently have the verbiage " the servicing of your loan may be assigned, sold or transferred to any other person at any time while the loan is outstanding" on our GFE. When the changes take effect,will we now have to have a separate disclosure again?
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#1091701 - 12/04/08 03:53 PM
Re: Servicing Disclosure Revision
TINKerBell
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Diamond Poster
Joined: Nov 2004
Posts: 2,309
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Yes.
Here's some wording from the supplementary information section of the Reg. X final rule from the 11/17/08 Federal Register.
"Several lenders and trade groups representing lenders and mortgage brokers commented favorably on the changes that conform the transfer of servicing disclosure regulations to the revised statutory requirements. However, lenders and their trade groups were generally opposed to including the transfer of servicing disclosure on the revised GFE."
"HUD Determination Based on the comments received, HUD has determined that the changes tothe transfer of servicing requirements should be included in the final rule. These changes conform HUD's regulations to the revised statutory requirements, and resolve any questions about whether lenders must still follow the outdated provisions. No commenters raised objections to the changes proposed; the most substantial comments received were from consumer groups that advocated expanding the coverage of the transfer of servicing requirements. In light of the numerous comments from lenders and those trade groups representing lenders that opposed inclusion of the transfer of servicing disclosure on the GFE, HUD has determined not to include that disclosure on the revised GFE at this time."
"The language on the revised model transfer of servicing disclosure form has been modified somewhat from the proposed rule in light of the comments received. The transfer of servicing disclosure form is not intended to provide a comprehensive list of all functions that might be performed by any servicer, but HUD agrees with those commenters that suggested that the description of the functions performed by servicers was too narrow. Accordingly, HUD has revised that sentence on the form to provide a more accurate description of the functions performed by loan servicers."
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Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.
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#1091774 - 12/04/08 04:47 PM
Re: Servicing Disclosure Revision
Reads Regs
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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I know the final rule is dated 11-17-2008...what is the mandatory compliance date? I can't seem to find it at the moment. I know the definition changes are effective 01/01/2010...but that's all I see a future date on. ]
Never mind.
Last edited by RR joker; 12/04/08 05:05 PM.
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#1092100 - 12/04/08 09:08 PM
Re: Servicing Disclosure Revision
RR Joker
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Platinum Poster
Joined: Aug 2005
Posts: 914
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Are you going to have the customers sign an acknowledgement that they received the disclosure. Is it wrong to do that?
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#1092117 - 12/04/08 09:30 PM
Re: Servicing Disclosure Revision
Sage
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Power Poster
Joined: Nov 2000
Posts: 2,701
PA
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I don't believe there is a requirement to have the customer sign to acknowledge receipt, but if that's how your bank demonstrates compliance, you can do it that way - i.e. it wouldn't be wrong, just not necessary.
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Opinions expressed are mine and not necessarily those of my employer.
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#1094396 - 12/09/08 07:53 PM
Re: Servicing Disclosure Revision
David Dickinson
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Gold Star
Joined: Jun 2007
Posts: 447
New England
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We've had a couple of suggestions at our bank for how to comply with the new servicing disclosure. One person suggested that we have 2 disclosures: one if we will service the mortgage and one if we will not be servicing the mortgage. Someone else suggested that we use one form with the "We may assign, sell, or transfer the servicing of your loan while the loan is outstanding" language and this will cover us whether we service the loan or not.
Is anyone willing to share how they might be handling this? Thanks in advance!
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#1094493 - 12/09/08 09:06 PM
Re: Servicing Disclosure Revision
Book Nerd
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100 Club
Joined: Apr 2003
Posts: 122
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I am working on the revisions to the Servicing Disclosure and I think that is a great question. My first thought was that we could set up a default to always check the option "We may assign, sell, or transfer the servicing of your loan while the loan is outstanding" language, but to allow the other options to be checked as applicable.
I also have a question based on Dave's response. Is the requirement for applicant's acknowledgement no longer applicable based on the revisions to 3500.21(b)(2)?
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#1095015 - 12/10/08 05:49 PM
Re: Servicing Disclosure Revision
David Dickinson
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100 Club
Joined: Mar 2004
Posts: 223
Minnesota
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Just so I'm clear...we currently have the shortened language "We may assign, sell, transfer, etc...." right at the bottom of our good faith estimate (we are still doing our GFE's in a somewhat manual fashion). The longer separate form was removed a few years ago and we went with just the shortened sentence. We do VERY little in the consumer real estate lending area - and usually only 2nd mortgages. We aren't in the practice of selling any loans.
Under the RESPA changes, can I still just provide the skinnied down version (We may assign, sell, transfer, etc.) or do I have to provide the longer wording again. If I can still provide the shortened version, do you think I can still include it on my GFE even though HUD decided not to combine them?
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#1095161 - 12/10/08 07:39 PM
Re: Servicing Disclosure Revision
travelgirl
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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Under the RESPA changes, can I still just provide the skinnied down version (We may assign, sell, transfer, etc.) or do I have to provide the longer wording again. If I can still provide the shortened version, do you think I can still include it on my GFE even though HUD decided not to combine them? The new RESPA rules allow the shorted version; however, it must be on a separate piece of paper. You won't be able to have it on the bottom of the GFE.
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#1095331 - 12/10/08 09:55 PM
Re: Servicing Disclosure Revision
David Dickinson
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100 Club
Joined: Mar 2004
Posts: 223
Minnesota
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Thanks David. That's what I was afraid of...killing more trees.
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#1097522 - 12/15/08 08:28 PM
Re: Servicing Disclosure Revision
Web
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Platinum Poster
Joined: Mar 2006
Posts: 738
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Everyone keeps talking about having a seperate servicing disclosure form to comply with the new RESPA rules. On our Harland system (LaserPro) we already have a servicing disclosure that states this information. Is it necessary to have a whole new form?
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#1097534 - 12/15/08 08:59 PM
Re: Servicing Disclosure Revision
Newbie06
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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If what you have meets the verbiage of the model form, then you are fine!
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1097599 - 12/15/08 09:57 PM
Re: Servicing Disclosure Revision
RR Joker
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Platinum Poster
Joined: Mar 2006
Posts: 738
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Thanks, that is what I figured.
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#1098061 - 12/16/08 06:34 PM
Re: Servicing Disclosure Revision
aim
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Platinum Poster
Joined: Nov 2005
Posts: 614
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Laser Pro has an option to put the short form either on the GFE or as a seperate sheet, but still the short version. It still has the long form too.
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#1098167 - 12/16/08 08:02 PM
Re: Servicing Disclosure Revision
David Dickinson
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Joined: Jan 2008
Posts: 6,389
Looking for My Happy Place....
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If it doesn't need a signature by regulation and it's a low risk item (in the case of civil liability), I encourage you NOT to add a signature. You may get it 99 out of 100 times but some LO is going to forget and it will be in violation of your procedures and will look like the LO didn't provide it to the customer. Why add a burden not provided in the regulation for a low risk issue? David, Just a note - my bank is FDIC regulated and they require this form to be signed.
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My opinion only.
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#1098321 - 12/16/08 10:30 PM
Re: Servicing Disclosure Revision
Dan Persfull
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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David, Just a note - my bank is FDIC regulated and they require this form to be signed. As Dan pointed out, your examiners are wrong. Your examiners are going by the regulation that was changed in the late 90's. My comment above, about not having the disclosure signed, is also pertaining to the new RESPA rules. These new rules specifically do NOT require a signature line. You may have to educate them.
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#1098396 - 12/17/08 12:40 AM
Re: Servicing Disclosure Revision
David Dickinson
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Power Poster
Joined: Jan 2008
Posts: 6,389
Looking for My Happy Place....
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Thanks! I appreciate both yours and Dan's comments. I did read the new rules and saw the "no signature required". Just thought I might have to wait until October to do something about it!
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What would you do if you knew you could not fail? ~ Dr. R Schuller
My opinion only.
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#1099495 - 12/18/08 04:20 PM
Re: Servicing Disclosure Revision
RR Joker
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Platinum Poster
Joined: Apr 2003
Posts: 933
New York State
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I know the final rule is dated 11-17-2008...what is the mandatory compliance date? I can't seem to find it at the moment. I know the definition changes are effective 01/01/2010...but that's all I see a future date on. ]
Never mind. Not sure why RR joker deleted this. What IS the required effective date for the new Servicing Disclosure? Is it 01/19/2009 or 01/01/2010?
Last edited by upstateNY; 12/18/08 04:22 PM.
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