Servicing Disclosure - Simplified?

Posted By: OnTheEdge

Servicing Disclosure - Simplified? - 09/20/02 04:48 PM

One of our folks attended seminar the other day and understood the speaker to say that servicing disclosure proposals had been finalized. No longer required as a separate and signed disclosure. Simply include a stmt whether the servcing would be assigned, sold or transferred with loan is outstanding. Can anyone confirm as final?
Posted By: Anonymous

Re: Servicing Disclosure - Simplified? - 09/20/02 04:51 PM

Sorry but I haven't heard anything about that. It would be nice if it were true.
Posted By: ahou

Re: Servicing Disclosure - Simplified? - 09/20/02 05:21 PM

I heard that too. As of 7-29-02 the servicing disclosure went away - just have to disclose that loan may be sold (can put on GFE) See page 49152 of proposed RESPA rule.
Posted By: Howard Lax

Re: Servicing Disclosure - Simplified? - 09/20/02 06:01 PM

This is what HUD said at 67 FR 49137, third column:

"Additionally, the Department plans to finalize the 1997 Section 6 transfer of servicing proposed rule; however, in the meantime the Section 6 language in the statute may be provided in conjunction with the GFE. Separate from this rulemaking, the Secretary is increasing the resources dedicated to enforcing and regulating RESPA."

Then at page 41952, top of the middle column:

"3. Section 6 Transfer of Servicing Language

In 1990, Congress amended RESPA to include a disclosure, which informs borrowers that their loan or the servicing of their loan, may be sold. 12 U.S.C. 2605, Public Law 93–533 section 6 (November 28, 1990). In 1997, HUD proposed a rule to implement the amended statute. Many comments were received and the rule was never finalized. 62 FR 25740. The Department plans to finalize the 1997 proposed rule shortly. However, in the meantime, the Section 6 language in the statute may be provided in conjunction with the GFE instead of the language currently indicated in § 3500.21 and Appendix MS–1."

This is nice, but it does not change the rule. My article cited earlier in this forum was critical of HUD for making this statement and not changing the rule. I would be cautious until HUD really makes a change in the rule before dumping the Servicing Disclosure Statement - HUD could change its mind about the GFE language that replaces Appendix MS-1.
Posted By: ahou

Re: Servicing Disclosure - Simplified? - 09/20/02 07:08 PM

I see what you mean. On page 49152 (middle column) HUD statement about using Section 6 language in the statute instead of language currently indicated in 3500.21 & Appendix MS-1 makes it appear that the servicing disclosure has gone away. Our bank will continue to give the servicing disclosure until we have specific info that says we don't have to.