Thread Options
#2106000 - 11/04/16 02:59 PM Escrow Servicer - No longer a Small Servicer?
TeamComply Offline
Gold Star
Joined: Aug 2016
Posts: 393
Attended a conference recently, presenter indicated that as a result of recent clarifications to the RESPA servicing rules, if we have escrow accounts in which there is a buyer and seller, the bank doesn't own the loan, but services it and charges a fee for doing so, we no longer meet the definition of a small servicer. Once the fee is charged, bank is no longer a small servicer. Is this how others are interpreting this?

Return to Top
Mortgage Servicing Rules
#2109238 - 12/01/16 02:29 PM Re: Escrow Servicer - No longer a Small Servicer? TeamComply
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,333
Cape Cod
The small servicer definition isn't in the RESPA rule (although it affects your required level of compliance with the RESPA servicing rules in Regulation X). It's found in section 1026.41(e) of Regulation Z. You may have misunderstood the presenter, since handling these "contract collections" for customers has been a problem for small servicers since the servicing rules became effective.

There's actually a pending amending to those rules, at 1026.41(e)(4)(iii)(D), that allows a small servicer to handle some of that type of business (for one property seller financers) without it being counted against them. That amendment is effective October 17, 2017.

Under current rules, the fee makes the contract "poison," killing your ability to qualify as a small servicer.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2109274 - 12/01/16 03:31 PM Re: Escrow Servicer - No longer a Small Servicer? TeamComply
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,333
Cape Cod
The Bureau just posted version 3.0 of its Small Entity Guide to Loan Servicing, which incorporates the pending changes. You can find it on the Bureau's "Title XIV Rules: Mortgage Servicing" page, at http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top