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#1871559 - 11/15/13 03:17 PM Dwelling vs Principal Dwelling
Dusty Offline
Member
Joined: Sep 2006
Posts: 68
New England
I need clarification. My understanding is that for purpose of figuring out if you are a small servicer you consider all residential dwellings but for the new ARM disclosure you only are required to send this if the dwelling is the consumer's principal dwelling. Correct?
Dusty

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Mortgage Servicing Rules
#1871574 - 11/15/13 03:48 PM Re: Dwelling vs Principal Dwelling Dusty
trout22 Offline
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Joined: Nov 2004
Posts: 313
Generally, that is correct. Be cautious in that you failed to mention the closed-end aspect in your statement though.

To determine if you're a small servicer refer to § 1026.41(a) and (e). From the small servicer compliance guide, page 15: "Only consider mortgage loans that you service. “Mortgage loan” is defined in § 1026.41(a)(1) to mean a closed-end consumer credit transaction secured by a dwelling. Use this definition to identify the pool of loans from which to determine your small servicer status. Do not include reverse mortgages or timeshare plans in the pool of loans from which to determine your small servicer status. This same pool of loans determines your status as a small servicer whether you are looking at the small servicer exemption with regard to provisions in Regulation X or Z."

Then the ARM disclosures will be edited effective 1/10/2014 at § 1026.20(c/d)(1)Coverage. (i) In general. For purposes of this paragraph (c), an adjustable-rate mortgage or "ARM" is a closed-end consumer credit transaction secured by the consumer's principal dwelling in which the annual percentage rate may increase after consummation.

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#1871588 - 11/15/13 04:09 PM Re: Dwelling vs Principal Dwelling Dusty
GTS333 Offline
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Joined: Jun 2010
Posts: 257
You are correct that the Periodic Statement requirements apply to closed-end consumer credit loans secured by a "dwelling", and that there is a small servicer exemption to the Periodic Statement requirements for those that qualify.

You are also correct that the ARM disclosures are applicable to closed-end consumer credit loans secured by a principal dwelling, but remember that there is no small servicer exemption to the ARM disclosures. So even if you qualify as a small servicer, you need to comply with the ARM notice requirements.
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#1871804 - 11/15/13 08:22 PM Re: Dwelling vs Principal Dwelling Dusty
Dusty Offline
Member
Joined: Sep 2006
Posts: 68
New England
Thank you both.

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