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#903830 - 02/13/08 01:11 PM Affiliate Sharing - Modifications
RoseLaw Offline
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We are still going through the final rules on affiliate marketing. I'm wondering if the rules impact sharing of info (trans/exp/and other) between affiliates for the purpose of performing a modification, or if this still would fall under a third party servicer exemption?

Any input is greately appreciated. We are revising our opu out management procedures between our affiliates, given that we have an increased amount of mods, we want to exclude them from limiting info available if possible.

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#903835 - 02/13/08 01:25 PM Re: Affiliate Sharing - Modifications RoseLaw
rlcarey Offline
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Galveston, TX
I guess I would need to know what types of affiliates you are referring too and why is an affiliate involved in a modification to a loan the bank holds.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#903965 - 02/13/08 03:30 PM Re: Affiliate Sharing - Modifications rlcarey
RoseLaw Offline
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One company is the servicing entity only, does not originate, services under third party servicing contracts only. The affiliated entity does not service, but originates only. Servicing entity will forward non-defaulted loans with upcoming re-sets to originating entity to pursue RBO or Mod. I know the servicing entity can just do the mod themselves, however, that is not how the program is set up at this time. Servicing entiy will mod on defaulted loans only at this time.

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#904068 - 02/13/08 04:49 PM Re: Affiliate Sharing - Modifications RoseLaw
rlcarey Offline
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Does the originating entity still own the loans being serviced?
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#904134 - 02/13/08 05:30 PM Re: Affiliate Sharing - Modifications RoseLaw
Ted Dreyer Offline
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Keep in mind that the new Affiliate Marketing rules do not limit your sharing of information, they limit the marketing that can be done by the affiliate with the information. As long as the servicing entity is not marketing to the customers, the Affilate marketing rules will not apply.

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#904138 - 02/13/08 05:33 PM Re: Affiliate Sharing - Modifications Ted Dreyer
rlcarey Offline
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Galveston, TX
But my question is trying to figure out if there may be marketing. On whose behalf are these entities acting? It sounds OK, but there are always those sneeky unanswered questions.
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#904228 - 02/13/08 06:54 PM Re: Affiliate Sharing - Modifications rlcarey
RoseLaw Offline
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Posts: 49
Yes, originating entity still "owns" loans, purely a servicing relationship, and typically, the mods are being done at the request of the borrower, but are being referred from the servicing entity to the affiliated originating entity for processing and completion.

I understand there may be a fine line as to the "marketing" and exactly what the business is describing to us of what they are intending to do. We do not share nonpublic info to nonaffiliated parties unless qualifying under an exemption in Reg P, if we are truly not marketing and not invoke the affiliate marketing rules from FACTA, is there any other restrictions I am missing here?

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#904236 - 02/13/08 07:06 PM Re: Affiliate Sharing - Modifications rlcarey
trail hiker Offline
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I'm with Randy. If the financial institution sold the loan and has not had a transaction with the customer for 18 months there is no existing relatiosnship between the customer and the financial institution.
If someone wants to perform a modification then someone is going to approach the customer with a product - marketing. (Unless of course, the customer approaches either entity and inquires about or requests the modification)
If sounds like the servicer wants the financial institution to market the customer with eligibility information without providing the opt-out. I beleive they can't do this.
Here is a solution:
The servicer can use their own eligibility information and market their own customer with an affiliate's information. The servicer can send a letter to their own customers explaining that they can contact the affiliate financial instituion for the modification. Include any information you want about the financial instituion including a loan officer's card as a contact.
This way no one shares eligibility information, the servicing company markets their own customer and an opt out is not required.

These are my opinions, not of my employer, and not to be used as legal advice.

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#904280 - 02/13/08 07:52 PM Re: Affiliate Sharing - Modifications trail hiker
trail hiker Offline
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I took so long to type my post that Rose clarified her position before I could hit the send button.

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#904402 - 02/13/08 09:23 PM Re: Affiliate Sharing - Modifications trail hiker
RoseLaw Offline
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Joined: Mar 2007
Posts: 49
I would think we would be ok for use of the info for mods as long as we are using the information to perform services on behalf of another person (affiliated)and the servicer has a pre-existing relationship with the consumer.

With the amount of mods these days and decrease in originations, we want to streamline our system opt out functionality between affiliates so we limit access to only information that may be prohibited b/c the consumer has opted out and the product is not a modification being performed on behalf of our affiliated entity.

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