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#1822433 - 06/11/13 04:32 PM Small Entity Compliance Guide - Periodic Statement
fmissle Offline
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Joined: Jul 2007
Posts: 959
Pac NW
Hello,
Just reading through the Small Entity Compliance Guide, trying to pick out some things that might be useful for training.

I ran across this (bolding mine for emphasis)

Originally Posted By: ii Stopping Periodic Statements ( 1026.41(b)
You no longer have to send periodic statements when:
You transfer the loan to another servicer.
The loan is fully paid or paid off through a refinance or sale of the house.
The loan is discharged in a foreclosure sale.
You must continue to send periodic statements even when consumers are delinquent or in bankruptcy.


Now, Im not a guru on bankruptcy or collections, but my understanding was that if a borrower filed BK, you are no longer allowed to pursue collection activities against them which includes sending periodic statements which would show a payment amount due.

Anyone else have thoughts on this? Am I totally wrong on the BK aspect of it?

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Mortgage Servicing Rules
#1822500 - 06/11/13 05:52 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
GoJays Offline
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Joined: Jan 2013
Posts: 25
We have thought of this as well and are likely going to have to create a separate periodic statement for customers in bankruptcy that will not look like an attempt to collect. So it will not reference amount due, it won't have a coupon attached, etc.

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#1823180 - 06/13/13 02:26 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
NotDoneYet Offline
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NotDoneYet
Joined: Jul 2010
Posts: 482
PA
As a small servicer, we are exempt from the periodic statement thankfully.

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#1823210 - 06/13/13 02:48 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
GTS333 Offline
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Posts: 256
Be careful in how you determine whether or not you are a small servicer. I have heard some people say "we service fewer than 5,000 mortgage loans per year, so we must be exempt". The determination of whether or not you qualify as a small servicer is more complicated than that. For example, if your institution (or any of its affiliates) services even one mortgage loan you did not originate or do not own, you would not qualify as a small servicer, even if you service 5,000 or fewer loans overall.

Also, remember there is a proposed rule already issued by the CFPB that would add some additional information about how to determine whether or not you are a small servicer. If you are relying on the small servicer exception and haven't read that proposed rule, I would suggest you do so.
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#1823340 - 06/13/13 05:20 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
NotDoneYet Offline
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NotDoneYet
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PA
Everything has been read and reread, analyzed and accounted for. We are a small servicer at this point and under the proposed rule. Now if they go to another proposed new or clarifying rule, it could all change.
Always need to stay on top of the game.

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#1823590 - 06/14/13 02:33 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
CSB98 Offline
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Joined: Dec 2003
Posts: 1,236
Wisconsin
Does anyone have a link to that proprosed rule regarding small servicers?

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#1823607 - 06/14/13 02:49 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
manimal Offline
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#1825776 - 06/20/13 07:22 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
NotDoneYet Offline
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NotDoneYet
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PA
Well, wouldn't you know it, the regulations haven't gone through another proposed/clarifying stage, but now my bank wants to purchase loans. However, the "didn't originate or don't own" still wouldn't kick us out of the small servicer definition since we would be the assignee. Correct?

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#1835063 - 07/22/13 03:44 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
bmw Offline
Junior Member
Joined: Jul 2012
Posts: 44
sooo..to rehash this again...i am reading the guide and it states "is there a small servicer exemption to the periodic statement rule? Yes, Small servicers are exempt from ALL requirements of the periodic statement." Do small servicers have to send statements for ARM loans?

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#1835275 - 07/22/13 08:33 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
(4) Small servicers. (i) Exemption. A creditor, assignee, or servicer is exempt from the requirements of this section for mortgage loans serviced by a small servicer.

(ii) Small servicer defined. A small servicer is a servicer that either:

(A) Services, together with any affiliates, 5,000 or fewer mortgage loans, for all of which the servicer (or an affiliate) is the creditor or assignee; or

(B) Is a Housing Finance Agency, as defined in 24 CFR 266.5.

(iii) Small servicer determination. In determining whether a servicer is a small servicer, the servicer is evaluated based on the mortgage loans serviced by the servicer and any affiliates as of January 1 for the remainder of the calendar year. A servicer that ceases to qualify as a small servicer will have six months from the time it ceases to qualify or until the next January 1, whichever is later, to comply with any requirements from which the servicer is no longer exempt as a small servicer. The following mortgage loans are not considered in determining whether a servicer qualifies as a small servicer:

(A) Mortgage loans voluntarily serviced by the servicer for a creditor or assignee that is not an affiliate of the servicer and for which the servicer does not receive any compensation or fees.

(B) Reverse mortgage transactions.

(C) Mortgage loans secured by consumers' interests in timeshare plans.

If you qualify as a small servicer, you are exempt from all of the section 1026.41 requirements.
Last edited by John Burnett; 07/22/13 08:34 PM.
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#1835753 - 07/23/13 11:25 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
BankonComp Offline
Member
Joined: Aug 2008
Posts: 81
How would this affect loans sold to Freddie Mac, servicing done on Bank side? Would this affect the qualification of being a small servicer? Wouldn't this create an exception to the exemption?

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#1835799 - 07/24/13 12:51 PM Re: Small Entity Compliance Guide - Periodic Statement fmissle
John Burnett Offline
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Cape Cod
Loans sold servicing-retained are counted toward the 5,000 limit. The concept of the small servicer exemption is designed to limit the impact of the rule on servicers with low volume. If you go above the 5,000 limit, including those servicing-retained sold loans, you are presumed to have the capital and capacity to comply with the rule, so the exemption is no longer available.
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