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#15800 - 04/18/02 08:13 PM Mortgage Servicing
Maria Offline
Platinum Poster
Joined: Apr 2001
Posts: 502
Sylacauga, Al, United States
We are considering servicing some mortgage loans. Does anyone know what regulations I need to review pertaining to this type of transaction? Also does anyone have an opinion if this type of transaction is worth the regulatory monitoring that may be required?

Thanks for your help.

Requests are mine not my employer.

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General Discussion
#15801 - 04/19/02 11:38 AM Re: Mortgage Servicing
JMB Offline
Member
JMB
Joined: Mar 2002
Posts: 59
Michigan
RESPA and Privacy are the regs to review. (When you service their loans, they become your customer). You will probably also want to have legal review the agreement to make sure that they approve.

As for whether or not "it is worth it", you'll need to look at the profit. If there are enough dollars to cover the risk and you have the capacity and systems, go for it!

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#15802 - 04/19/02 01:29 PM Re: Mortgage Servicing
Howard Lax Offline
Gold Star
Howard Lax
Joined: Jan 2002
Posts: 478
Bloomfield Hills, Michigan
Many banks are getting out of this business because the regulatory costs eat up the meager profits. If this is a large portfolio, you might want to consider it. Are you prepared to respond to requests from condominiums for approval of changes to declarations? Do you have all of your collection letters in place (and do you have the homeownership counseling notice incorporated)? Are you aware of all of the state law restrictions on collection activities (watch out for states that have a UCCC)? Can you handle the changes in insurance policies by consumers? Do you have your escrow disclosure software in place? Who is the custodian of the documents? Are you prepared to handle incoming documents, such as the mortgage from the register of deeds and the final title policy? Do you have an arrangement for forced placed insurance? Flood zone checks (LOL coverage)? Tax service? Are you prepared to pay taxes in installments where permitted to reduce the amount needed in the esccrow account? Are you ready to send out annual financial privacy notices? 1099s? Escrow analyses? Payment coupons?

Do you really know what you are getting into, and how much staff you will need to cover these items?
_________________________
Howard A. Lax Lipson, Neilson, et. al. Bloomfield Hills, MI hlax@lipsonneilson.com

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