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To the extent the Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. Pursuant to 12 CFR 617.7000, certain servicers may be considered qualified lenders only with respect to loans discounted or pledged pursuant to 12 U.S.C. (1) The format and a completed example for an initial escrow account statement are set out in Public Guidance Documents entitled Initial Escrow Account Disclosure StatementFormat and Initial Escrow Account Disclosure StatementExample, available in accordance with the direction in the definition of Public Guidance Documents in 1024.2. The lender may, at its option, charge a fee limited to the cost of a credit report. For example, assume a borrower's bankruptcy case commences on June 1, the servicer provides the written notice on July 10 in compliance with 1024.39(b) as modified by 1024.39(c)(1)(iii), and the bankruptcy case is dismissed on August 1. The appropriate box should be checked. 2015-15 (Bulletin) regarding the Real Estate Settlement Procedures Act (RESPA). The comparison chart is comprised of three sections: Charges That Cannot Increase, Charges That Cannot Increase More Than 10%, and Charges That Can Change. 2602(7)). Except as set forth in this section with respect to an assertion of error under paragraph (b)(9) or (10) of this section, nothing in this section shall limit or restrict a lender or servicer from pursuing any remedy it has under applicable law, including initiating foreclosure or proceeding with a foreclosure sale. 76 FR 78981, Dec. 20, 2011, unless otherwise noted. The records may be retained by any method that reproduces the records accurately (including computer programs) and that ensures that the servicer can easily access the records (including a contractual right to access records possessed by another entity). Official status. A servicer receives a notification of cancellation or non-renewal from the borrower's insurance company before payment is due on the borrower's hazard insurance. RESPA means the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. Payment tolerance. When the net payment to the mortgage broker from the lender is negative, there is a charge to the borrower and it is entered as a positive amount in Block 2 of the GFE. FAR). 2609), or statements required by the Truth in Lending Act (15 U.S.C. They will detail the possible penalties and provide case examples of non-compliance. (b) Delivery. (1) Partial exemption. Line 1107 is used to record the amount of the total title insurance premium, including endorsements, that is retained by the title agent. The loan number is the lender's identification number for the loan. (1) Investigation and response requirements. 2. Where foreclosure procedure does not require any court filing or proceeding, and also does not require any document to be recorded or published, a document is considered the first notice or filing if it is the earliest document that establishes, sets, or schedules a date for the foreclosure sale. (a) Lists that appear in the commentary may be exhaustive or illustrative; the appropriate construction should be clear from the context. Refer to the definitions section ( 1024.2) of 12 CFR part 1024 (Regulation X) for specific definitions of terms used in these instructions. Where such documents do not specifically establish an escrow account, whether a servicer may establish an escrow account for the loan is a matter for determination by other Federal or State law. user convenience only and is not intended to alter agency intent Assertions of errors in the form of a judicial action complaint, subpoena, or discovery request that purports to require servicers to respond to each numbered paragraph; and. This section requires no loan originator action. (1) In general. (4) The mortgage broker is not permitted to charge, as a condition for providing a GFE, any fee for an appraisal, inspection, or other similar settlement service. Assertions of errors in a form that is not reasonably understandable or is included with voluminous tangential discussion or requests for information, such that a servicer cannot reasonably identify from the notice of error any error for which 1024.35 requires a response. (1) The person making each referral has provided to each person whose business is referred a written disclosure, in the format of the Affiliated Business Arrangement Disclosure Statement set forth in appendix D of this part, of the nature of the relationship (explaining the ownership and financial interest) between the provider of settlement services (or business incident thereto) and the person making the referral and of an estimated charge or range of charges generally made by such provider (which describes the charge using the same terminology, as far as practical, as section L of the HUD1 settlement statement). If a servicer has not established an escrow account for a federally related mortgage loan and only receives payments for discretionary items, this section is not applicable. We have a right to invoke foreclosure based on the terms of your mortgage contract. Section 1024.39(c) does not require a servicer to communicate with a borrower in a manner that would be inconsistent with applicable bankruptcy law or a court order in a bankruptcy case. Where no cost includes third party settlement services, the credit shown in Line 802 will more than offset the amount shown in Line 801. 5. The servicer may time its attempts to establish live contact such that a single attempt will meet the requirements of 1024.39(a) for two missed payments. 1. To the extent a servicer can reasonably identify a valid assertion of an error in a notice of error that is otherwise overbroad, the servicer shall comply with the requirements of paragraphs (d), (e) and (i) of this section with respect to that asserted error. The penalties for violating this law are severe. RESPA aims to protect individuals involved in a real estate . Subtract Line 602 from Line 601 and enter the amount of cash due to or from the Seller at settlement on Line 603. The term also includes the service of conducting a settlement. Line 1400 must state the total settlement charges as calculated by adding the amounts within each column. (C) Upon the receipt of such documents, promptly make a confirmation determination and promptly notify the person, as applicable, that the servicer has confirmed the person's status, has determined that additional documents are required (and what those documents are), or has determined that the person is not a successor in interest. This paragraph shall apply to the following transactions: (ii) Closed-end loans, as defined in 12 CFR 1026.2(a)(10) of Regulation Z, when the lender takes a subordinate lien; (iv) Any other federally related mortgage loan whose purpose is not the purchase of a 1- to 4-family residential property. (b) No referral fees. Information request. If the monthly amount owed can rise even if the borrower makes payments on time, the loan originator must indicate the period of time after which the monthly amount owed can first change, the maximum amount to which the monthly amount owed can rise at the time of the first change, and the maximum amount to which the monthly amount owed can rise over the life of the loan. A servicer is not relieved of its obligations because foreclosure counsel's actions or inaction caused a violation. (iii) Hazard insurance obtained by a borrower but renewed by the borrower's servicer at its discretion, if the borrower agrees. 4301 et seq. 4. 41(c)(2)(iv) Facially complete application. (F) Is the subject of a home equity conversion mortgage, also frequently called a reverse mortgage, issued by any maker of mortgage loans specified in paragraphs (1)(ii)(A) through (D) of this definition. (1) In general. An asterisk must also be placed in this section with the following statement: Paid by or through draws from the principal limit. Reverse mortgage transactions are not considered to be balloon transactions for the purposes of the loan terms disclosed on page 3 of the HUD1. iv. items must not be placed in the Borrower or Seller columns, but rather on the appropriate line outside the columns. If the interest rate has not been locked, or a locked interest rate has expired, the charge or credit for the interest rate chosen, the adjusted origination charges, per diem interest, and loan terms related to the interest rate may change. (ii) Transfer date defined. (iii) Uses the same servicer that serviced the prior mortgage loan to service the new mortgage loan. However, a servicer may provide such additional information to a borrower on separate pieces of paper in the same transmittal. (3) The borrower fails to perform under an agreement on a loss mitigation option. (i) In general. Foreclosure sale not scheduled. Using the shopping chart. This chart is a shopping tool to be provided by the loan originator for the borrower to complete, in order to compare GFEs. If the charge is unknown to the servicer, the servicer may base the estimate on the preceding year's charge, or the preceding year's charge as modified by an amount not exceeding the most recent year's change in the national Consumer Price Index for all urban consumers (CPI, all items). If space permits, such information may be added at the end of the HUD1. [76 FR 78981, Dec. 20, 2011, as amended at 81 FR 72370, Oct. 19, 2016]. Line 700 is used to enter the sales commission charged by the sales agent or real estate broker. Delivery to co-applicants. 20, 2023]. 1. (2) Escrow analysis at creation of escrow account. In other cases, comments have more general application and are designated, for example, as comment 40(a)1. Because a probate proceeding is not required under the applicable law of the relevant jurisdiction to recognize the transfer of title, it generally would not be reasonable for the servicer to require documentation of a probate proceeding. And, importantly, the MSA FAQs make it clear that "RESPA Section 8 does not prohibit payments under MSAs if the purported marketing services are actually provided, and if the payments are reasonably related to the market value of the provided services only," although a cautionary note is added that "under Regulation X, the value of the referral, i.e., any additional business that might be provided by the referral, cannot be taken into consideration when determining whether the payment has a reasonable relationship to the value of the services provided.". If no such separate disclosure is provided, the loan originator cannot issue a revised GFE, except as otherwise provided in paragraph (f) of this section. The amount in line 1001 must be listed in the columns, and the itemizations in lines 1002 through 1007 must be listed outside the columns. A servicer may not extend the time period for requests for information governed by paragraph (d)(2)(i)(A) of this section. 35(e)(1) Investigation and response requirements. See comment 41(c)(3)(i)3. 1. Policies and procedures. 1. 38(b)(3) Facilitating oversight of, and compliance by, service providers. 2602(2)). To the extent the Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. 2617(b)) shall not include the special information booklet prescribed by the Bureau or any other statement or issuance, whether oral or written, by an officer or representative of the Bureau, letter or memorandum by the Director, General Counsel, or other officer or employee of the Bureau, preamble to a regulation or other issuance of the Bureau, Public Guidance Document, report to Congress, pleading, affidavit or other document in litigation, pamphlet, handbook, guide, telegraphic communication, explanation, instructions to forms, speech or other material of any nature which is not specifically included in paragraph (a)(1) of this section. The comments are designated with as much specificity as possible according to the particular regulatory provision addressed. will bring you directly to the content. Line 901 is used if interest is collected at settlement for a part of a month or other period between settlement and the date from which interest will be collected with the first regular monthly payment. If there is a credit in Block 2 of the GFE or Line 802 of the HUD1/1A, the credit should be entered as a negative number. (2) Treatment of payments. A borrower requests a copy of a telephonic communication with a servicer. (iv) A return on franchise relationship may be a payment to or from a franchisee but it does not include any payment which is not based on the franchise agreement, nor any payment which varies according to the number or amount of referrals by the franchisor or franchisee or which is based on a franchise agreement which has been adjusted on the basis of a previous number or amount of referrals by the franchiser or franchisees. 4. Section 1024.39 does not prohibit a servicer from satisfying its requirements by establishing live contact with and, if applicable, providing information about loss mitigation options to a person authorized by the borrower to communicate with the servicer on the borrower's behalf. Understanding which charges can change at settlement. This section informs the applicant about which categories of settlement charges can increase at closing, and by how much, and which categories of settlement charges cannot increase at closing. Except as otherwise provided in this subpart, disclosures required under this subpart must be clear and conspicuous, in writing, and in a form that a recipient may keep. For purposes of this definition, the term creditor does not include any agency or instrumentality of any State, and the term residential real estate loan means any loan secured by residential real property, including single-family and multifamily residential property; (E) Is originated either by a dealer or, if the obligation is to be assigned to any maker of mortgage loans specified in paragraphs (1)(ii)(A) through (D) of this definition, by a mortgage broker; or. Any loan secured by vacant or unimproved property, unless within two years from the date of the settlement of the loan, a structure or a manufactured home will be constructed or placed on the real property using the loan proceeds. Facts. Because [hazard][Insurance Type] insurance] is required on your property, we intend to maintain insurance on your property by renewing or replacing the insurance we bought. A servicer may rely on 1024.32(c)(4) if the servicer provides a specific written disclosure required by 1024.17, 1024.33, 1024.34, 1024.37, or 1024.39(b) to another borrower. Facts: A is an attorney who, as a part of his legal representation of clients in residential real estate transactions, orders and reviews title insurance policies for his clients. (ii) For which one of the following paragraphs applies. Section 1024.38(b)(1)(vi)(C) requires a servicer to maintain policies and procedures reasonably designed to ensure that, upon receipt of the documents identified by the servicer, the servicer promptly notifies a potential successor in interest that, as applicable, the servicer has confirmed the potential successor in interest's status, has determined that additional documents are required, or has determined that the potential successor in interest is not a successor in interest. See comment 39(a)5. For purposes of 1024.41(f)(3)(ii)(C), a servicer has not received a communication from the borrower if the servicer has not received any written or electronic communication from the borrower about the mortgage loan obligation, has not received a telephone call from the borrower about the mortgage loan obligation, has not successfully established live contact with the borrower about the mortgage loan obligation, and has not received a payment on the mortgage loan obligation. 1. RESPA & ECOA Flashcards | Quizlet The servicer must promptly request such additional information or documents from the borrower pursuant to 1024.41(c)(2)(iv). 2. (iii) The initial interest rate is the interest rate indicated on the legal obligation. Retaining records that document actions taken with respect to a borrower's mortgage loan account does not necessarily mean actual paper copies of documents. B. Click "accept" below to confirm that you have read and understand this notice. 1. (a) Information request. The voluntary agreement may not alter how surpluses are to be treated when the next escrow analysis is performed at the end of the escrow accounting year covered by the voluntary agreement. This series covers government recording and transfer charges. A servicer must maintain policies and procedures reasonably designed to ensure that the servicer can retain this information and promptly facilitate communication with potential successors in interest when a servicer is notified of their existence. The penalty for violating section 8 of RESPA is a fine of up to $10,000 and possibly one year of jail time. If a servicer cannot comply with its obligations pursuant to 1024.35(e) by the earlier of a foreclosure sale or 30 days after receipt of the notice of error, a servicer may cancel or postpone a foreclosure sale, in which case the servicer would meet the time limit in 1024.35(e)(3)(i)(B) by complying with the requirements of 1024.35(e) before the earlier of 30 days after receipt of the notice of error (excluding legal public holidays, Saturdays, and Sundays) or the date of the rescheduled foreclosure sale. A's payments of bonuses to its employees for the referral of business to A or A's affiliates, B and C, are exempt from section 8 under 1024.14(g)(1). However, if the borrower fails to comply with the program or plan or requests further assistance, the servicer must immediately resume reasonable diligence efforts. Methods of retaining records. For example, assume a transferor servicer denied a borrower for all loan modification options but offered the borrower a short sale option, and assume that the borrower's appeal of the loan modification denial was pending as of the transfer date. (borrower) or P.O.C. i. Where the model forms MS3(A), MS3(B), MS3(C), and MS3(D) use the term hazard insurance, the servicer may substitute hazard insurance with homeowners' insurance or property insurance., Appendix MS4Model Clauses for the Written Early Intervention Notice. full text search results 2. by or on behalf of the borrower. A servicer's determination not to offer a borrower a loan modification available to the borrower constitutes a denial of the borrower for that loan modification option, notwithstanding whether a servicer offers a borrower a different loan modification option or other loss mitigation option. (a) Lender to provide special information booklet. Nor may the prohibitions of this part be avoided by creating an arrangement wherein the purchaser of services splits the fee. 1. Offers not prohibited. Administrative and processing services related to title services must be included in the title underwriter's or title agent's own charge. A supplies the FAX machine at no cost or at a reduced rental rate based on the number of credit reports ordered. For reverse mortgages, the amount of any initial draw at settlement is disclosed on Line 204. A period of overlapping insurance coverage means the period of time during which the force-placed insurance purchased by a servicer and the hazard insurance purchased by a borrower were in effect at the same time. 1. If a transferee servicer acquires the servicing of a mortgage loan for which the period to provide the notice required by paragraph (b)(2)(i)(B) of this section has not expired as of the transfer date and the transferor servicer has not provided such notice, the transferee servicer must provide the notice within 10 days (excluding legal public holidays, Saturdays, and Sundays) of the transfer date. 2015(b)(1). (5) Updating notice with borrower information. 1. Upon receiving such required documents or information, the servicer must promptly provide the borrower with the written notice pursuant to paragraph (c)(1)(ii) of this section. Information about a borrower's hazard insurance received by a servicer from the borrower, the borrower's insurance provider, or the borrower's insurance agent, may provide a servicer with a reasonable basis to believe that the borrower has either complied with or failed to comply with the loan contract's requirement to maintain hazard insurance. If the lender, mortgage broker who anticipates using table funding, or dealer in a first lien dealer loan knows at the time of making the disclosure whether it will service the mortgage loan for which the applicant has applied, the disclosure must, as applicable, state that such entity will service such loan and does not intend to sell, transfer, or assign the servicing of the loan, or that such entity intends to assign, sell, or transfer servicing of such mortgage loan before the first payment is due. When a servicer is required to comply with the requirements of 1024.41 for such a subsequent loss mitigation application, the servicer must comply with all applicable requirements of 1024.41. In preparing the statement, the servicer may assume scheduled payments and disbursements will be made for the final 2 months of the escrow account computation year. The servicer must have policies and procedures reasonably designed to identify whether any such loan modification agreement exists with the transferor servicer and to obtain any such agreement from the transferor servicer. 1. 1. A servicer has flexibility to determine such policies and procedures and methods in light of the size, nature, and scope of the servicer's operations, including, for example, the volume and aggregate unpaid principal balance of mortgage loans serviced, the credit quality, including the default risk, of the mortgage loans serviced, and the servicer's history of consumer complaints. For purposes of paragraphs (e) through (h) of this section, the transferee servicer must treat such a pending complete loss mitigation application as facially complete under paragraph (c)(2)(iv) as of the date it was first facially complete or complete, as applicable, with respect to the transferor servicer. Penalties. A servicer that has made any such motion before receiving a complete loss mitigation application has not moved for a foreclosure judgment or order of sale if the servicer takes reasonable steps to avoid a ruling on such motion or issuance of such order prior to completing the procedures required by 1024.41, notwithstanding whether any such action successfully avoids a ruling on a dispositive motion or issuance of an order of sale. The information requested is confidential, proprietary or privileged. Types of documents to be provided. Title 12 was last amended 6/23/2023. A lender, in connection with dealer loans, is the lender to whom the loan is assigned, unless the dealer meets the definition of creditor as defined under federally related mortgage loan in this section. the hierarchy of the document. Penalty means a late charge imposed by the payee for paying after the disbursement is due. A transferee servicer must comply with the applicable requirements of 1024.41 with respect to a loss mitigation application received as a result of a transfer, even if the transferor servicer was not required to comply with 1024.41 with respect to that application (for example, because 1024.41(i) precluded applicability of 1024.41 with respect to the transferor servicer). (a) Inspection one day prior to settlement upon request by the borrower. (6) Restrictions on pre-accrual. Facts: A, a provider of settlement services, provides settlement services at abnormally low rates or at no charge at all to B, a builder, in connection with a subdivision being developed by B. Facts: B, a lender, encourages persons who receive federally related mortgage loans from it to employ A, an attorney, to perform title searches and related settlement services in connection with their transaction. A borrower's delinquency begins on the date an amount sufficient to cover a periodic payment of principal, interest, and, if applicable, escrow becomes due and unpaid, and lasts until such time as no periodic payment is due and unpaid, even if the borrower is afforded a period after the due date to pay before the servicer assesses a late fee.

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