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#2280547 - 02/01/23 05:06 PM Small servicer exemption mortgage loan type
newyork Offline
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Joined: Aug 2008
Posts: 447
Are the consumer dwelling secured construction only loans count towards the 5,000.00 threshold to be exempt from mortgage servicing rules?

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Mortgage Servicing Rules
#2280553 - 02/01/23 07:22 PM Re: Small servicer exemption mortgage loan type newyork
rlcarey Online
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rlcarey
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Posts: 83,228
Galveston, TX
1024.31 Mortgage loan means any federally related mortgage loan, as that term is defined in § 1024.2 subject to the exemptions in § 1024.5(b), but does not include open-end lines of credit (home equity plans).
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#2280555 - 02/01/23 07:37 PM Re: Small servicer exemption mortgage loan type newyork
Inherent_Risk Offline
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Joined: Jan 2017
Posts: 570
Why would they be exempt? There's no applicable exemption.

"(1) Scope. This section applies to a closed-end consumer credit transaction secured by a dwelling, unless an exemption in paragraph (e) of this section applies. A closed-end consumer credit transaction secured by a dwelling is referred to as a mortgage loan for purposes of this section."

"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 non-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.

(D) Transactions serviced by the servicer for a seller financer that meets all of the criteria identified in § 1026.36(a)(5)."

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#2280557 - 02/01/23 07:40 PM Re: Small servicer exemption mortgage loan type newyork
rlcarey Online
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rlcarey
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Posts: 83,228
Galveston, TX
The context of the question would also be nice I would think?
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#2280568 - 02/02/23 03:55 PM Re: Small servicer exemption mortgage loan type newyork
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Why would they be exempt?

Unless you are referring to a construction-permanent loan then a construction only loan does not meet the definition of a mortgage loan therefore they are not covered.

1024.2 - Federally related mortgage loan means:

(1) Any loan (other than temporary financing, such as a construction loan):
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#2280693 - 02/06/23 07:39 PM Re: Small servicer exemption mortgage loan type newyork
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Classic inter-regulation definition borrowing, Dan. Can't do it in this context.
Last edited by John Burnett; 02/06/23 07:40 PM.
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