On January 17, 2013, the Consumer Financial Protection Bureau announced new mortgage servicing-related amendments to Regulation Z to implement Dodd-Frank requirements for periodic statements on certain mortgage loans, handling partial payments, responding to requests for payoff amounts and providing notices on adjustable rate mortgage loans. Simultaneously, different servicing-related amendments were made to Regulation X. This webinar focuses exclusively on the Reg Z servicing changes.
The rulemaking document is lengthy and complex. We break it all down into manageable components, helping you comprehend the big picture and all the small details.
The first task is to determine which loans are covered and if you will be affected. Some servicers will be able to avail themselves of the small servicer exemption, but it only applies to some of the new requirements, not to all of them, and there are strict criteria that must be met to qualify for the exemption.
The requirement for periodic billing statements represents a substantial change from what mortgage servicers have supplied to borrowers in the past. The nature and scope of information to be included will require lots of prep time before the deadline to get it all right. While there is a coupon book exception to the billing statement requirement, you will learn it is extremely limited in applicability, so the likelihood you are producing a compliant coupon book is low. If you fall within this rule's special small servicer exemption, however, you will escape the periodic billing statement mandate.
Whether you are making ARM loans now, or simply anticipate that you might in the future as an alternative to balloon loans, the ARM loan notice requirements will be of interest. One notice is going away, but two notices, with new timing requirements, remain, along with model and sample forms for your use.
Servicers of all sizes will have new obligations when it comes to disclosing if partial payments will be accepted and, if so, how they will be credited. Plus, there are specific new obligations for responding to written requests for payoff balance information.
In this program we will cover:
- What loans are covered by the new servicing requirements
- The small servicer exemption - who qualifies and when it applies
- Content, timing and format requirements for the new periodic billing statement
- The coupon book alternative to the periodic statement requirement and when it can be used
- Notices that must be sent period to the first payment due after the rate first adjusts on an ARM
- Elimination of one of the ARM loan notices
- Notices required before payment at a new level is due when a rate adjustment causes the payment to change
- What you need to address for partial payments
- How to respond to requests for account payoff balances
- How existing loans are affected
The program is designed for managers, loan originators, loan officers, lending assistants, compliance officers, auditors and others with responsibilities for originating mortgage loans.