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#2234724 - 04/13/20 09:17 PM Notice of Complete Loss Mit App
Compliance in AR Offline
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Joined: Sep 2015
Posts: 20
Can someone help me wrap my brain around notice requirements for a complete Loss Mit application? 1024.41(c)(3) gives the requirements for the content of the notice, but it appears (based on 1024.41 (c)(3)(ii)(A) that a bank would be exempt from providing this notice if they provide the (b)(2)(i)(B) notice that the application is complete.

If I'm understanding this correctly, does this mean that if we deem the application complete the first time it is submitted, and provide the (b)(2)(i)(B) notice within 5 days, we don't have to provide the (c)(3) notice. But if we deem the application incomplete the first time it is submitted, and later deem it complete when the documentation we need is supplied, we do have to provide the (c)(3) notice. Is that accurate?

I guess I'm confused because the (c)(3) notice appears to require a good bit more information than the (b)(2)(i)(B) notice. Why are we exempt from supplying that information if the app is deemed complete on the first submission? Thank you!

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Mortgage Servicing Rules
#2254813 - 06/03/21 06:46 PM Re: Notice of Complete Loss Mit App Compliance in AR
Always_Learning Offline
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Joined: Aug 2015
Posts: 2
Does anyone have any insight on this? I am confused about when we are required to send the more detailed notice as well.

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#2254843 - 06/04/21 01:04 PM Re: Notice of Complete Loss Mit App Compliance in AR
Inherent_Risk Offline
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Joined: Jan 2017
Posts: 358
I think it was just how and when the the rule was changed. Before the rule changes in 2016 the Bank was only required to inform of complete application if it was complete when provided ((b)(2)(i)(B)). The new (c)(3) notice carved the already existing (and less comprehensive) notice out.

From the final rule:

Current § 1024.41 requires a servicer to notify a borrower that an
application is complete only if the application is complete when the servicer provides the notice
acknowledging receipt of an application under § 1024.41(b)(2)(i)(B). The Bureau learned from
pre-proposal outreach efforts that applications are rarely complete at that stage. Many borrowers
who completed an application might not receive any notice specifying that the application was
complete. Because the foreclosure protections under § 1024.41(f)(2) and (g)246 are triggered
based on when the borrower submits a complete loss mitigation application, clarity as to when
the application is complete is vital.

Proposed § 1024.41(c)(3)(ii) stated that a servicer need not provide the notice of
complete application in three circumstances: if the servicer has already notified the borrower
under § 1024.41(b)(2)(i)(B) that the application is complete and the servicer has not
subsequently requested additional information or a corrected version of a previously submitted
document from the borrower to complete the application, the application was not complete or
facially complete more than 37 days before a foreclosure sale, or the servicer has already
provided a notice approving or denying the application under § 1024.41(c)(1)(ii). These
exceptions were intended to avoid unnecessary burden on servicers and prevent borrower
confusion due to the receipt of conflicting or redundant information.

The Bureau is adopting § 1024.41(c)(3)(ii) substantially as proposed, with minor
revisions to improve clarity. Section 1024.41(c)(3)(ii) provides that a servicer is not required to
provide a notice pursuant to § 1024.41(c)(3)(i) under three circumstances: (1) the servicer has
already provided the borrower a notice under § 1024.41(b)(2)(i)(B) informing the borrower that
the application is complete and the servicer has not subsequently requested additional
information or a corrected version of a previously submitted document from the borrower 353
pursuant to § 1024.41(c)(2)(iv); (2) the application was not complete or facially complete more
than 37 days before a foreclosure sale; or (3) the servicer has already provided the borrower a
notice regarding the application under § 1024.41(c)(1)(ii). As the Bureau explained in the
proposal, these exceptions are intended to avoid unnecessary burden on servicers and prevent
borrower confusion due to the receipt of conflicting or redundant information. The Bureau
received no comments on this aspect of the proposal.

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#2254844 - 06/04/21 01:21 PM Re: Notice of Complete Loss Mit App Compliance in AR
Inherent_Risk Offline
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Joined: Jan 2017
Posts: 358
FWIW, we just have one completed application letter covering the requirements of both and provide it whenever we have a completed application. When implementing, that was considered the much easier option operationally.

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#2254931 - 06/07/21 03:36 PM Re: Notice of Complete Loss Mit App Inherent_Risk
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,593
Cape Cod
Originally Posted by Inherent_Risk
The Bureau is adopting § 1024.41(c)(3)(ii) substantially as proposed, with minor
revisions to improve clarity.

How many of you choked on "to improve clarity"?
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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