RUTHANNE VISNAUSKAS Commissioner/CEO. ANDREW M. CUOMO Governor. By E mail. November 1, Seller s Guide Bulletin #5 2018

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1 c By E mail ANDREW M. CUOMO Governor RUTHANNE VISNAUSKAS Commissioner/CEO November 1, 2018 Seller s Guide Bulletin # RE: MERS PARTICIPATION, CHANGE IN TRANSFER OF SERVICING FOR MORTGAGE LOANS SOLD TO SONYMA; SONYMA EXPRESS SUPPORT; HABITAT FOR HUMANITY EXTENDED INTEREST RATE LOCK PERIOD; and EXPANSION OF NEIGHBORHOOD REVITALIZATION & GRADUATE TO HOMEOWNERSHIP PROGRAMS Dear Participating Lender: Please be advised of the following as it relates to recent guideline changes and effective dates previously announced, to all State of New York Mortgage Agency ( SONYMA or the Agency ) programs, where applicable. MERS PARTICIPATION Effective November 1 st, 2018, SONYMA will be an active MERS participant. Lenders who are currently MERS members are permitted to use the MERS system when transferring ownership to SONYMA thereby eliminating the need for a paper assignment of mortgage with MERS as Original Mortgagee ( MOM ) language to the agency. This will be only for 1 st lien real property mortgages. This change will not apply to Cooperative Share Loans and second liens (e.g. DPAL and NRP DPAL loans), which will still require traditional paper assignments. MERS Transfer of Beneficial Ownership (TOB) IF YOU ARE A MERS MEMBER, THE FOLLOWING APPLIES: MERS, as nominee for the lender, and for purposes of recording the mortgage instrument, the MERS as Original Mortgagee ( MOM ) language must be incorporated within the Security Instrument. A recorded Assignment of Mortgage (Form 202) to the State of New York Mortgage Agency with MOM language will no longer be required. MERS must be named as Mortgagee and Name of Insured on Schedule A of the Title policy. The Mortgage Identification Number, MIN #, is required and should be indicated on the top right portion of the Security Instrument. Please do not place the MIN # within the recording margin of the document. Beneficial ownership rights are transferred to SONYMA on the MERS System. This transfer must occur within seven (7) calendar days or less from the loan purchase date and be effective as of the loan s purchase date. Lenders are required to upload evidence of the transfer to BlitzDocs. The transfer of Servicing Rights (TOS) to M&T Bank must occur, after the TOB to SONYMA has been completed, also within seven (7) calendar days or less from the loan purchase date. SONYMA s MERS Org ID # is Page 1 of 6 Bulletin

2 If you are not a MERS System Member, please continue using the existing process of assigning the loan to the State of New York Mortgage Agency ( SONYMA"). MERS Transfer of Servicing Rights (TOS) IF YOU ARE A MERS MEMBER, THE FOLLOWING APPLIES: If Lender uses the SONYMA Master Servicer (M&T Bank), transfer of Servicing Rights (TOS) to M&T Bank must occur after the Transfer of Beneficial Ownership Rights (TOB) to SONYMA. M&T s MERS Org ID is # If Lender currently services their own SONYMA originations, please follow TOB steps above within 7 calendar days of loan purchase. The Servicer MERS ID will remain in the Servicing Lender s MERS Servicing portfolio. IF YOU ARE NOT A MERS SYSTEM MEMBER: There is no need to act to transfer the servicing of mortgage loans purchased by the State of New York Mortgage Agency ( SONYMA"). CHANGE IN TRANSFER OF SERVICING FOR MORTGAGE LOANS SOLD TO SONYMA Effective on all loans closed on or after November 1, 2018, SONYMA will require a pay history on any loans delivered or purchased after the 1 st payment due date, for which payments have been received or are owed. Originating lenders will be responsible for the interim servicing of the loan prior to purchase, including processing of payments and remitting tax, insurance or other invoices owed. Servicing Documents Lenders whose loans are serviced by our Master Servicer, will no longer be required to submit a servicing package directly to our Master Servicer after closing. Instead, SONYMA will forward all necessary documents at the time of purchase so the loans can be onboarded with the Master Servicer. When submitting loans to SONYMA for purchase, non-servicing lenders must upload copies of the following documentation to BlitzDocs: Goodbye Letter (Sample attached) Notice of Sale or Transfer of Servicing New York State RP-954 IRS W-9 for each borrower Initial Escrow Disclosure Statement Escrow Accrual Sheet Last Tax Receipts and Search FDSI Flood Certification with Life of Loan Tracking (if not provided, $2 will be net funded at purchase for conversion) PMI Disclosure Purchase Dates, Interest & Payments For loans purchased prior to the 15 th day of the month, the next payment will be collected by the Master Servicer and the lender will receive an interest credit for the number of days of the month prior to purchase. For loans purchased after the 15 th day of the month, the next payment will be retained by the originating lender, and interest will be net funded from the purchase wire. The Goodbye Letter must be uploaded to BlitzDocs at the time the loan is submitted for purchase and must reflect the correct Page 2 of 6 Bulletin

3 payment amount and mailing address. All tax service fees, impound escrows, and flood cert life of loan tracking fees will be net-funded at time of purchase. Notice of Servicing Transfer RESPA requires that the Mortgagor receive a notice of servicing transfer letter, also known as a Goodbye Letter, no later than fifteen (15) calendar days prior to the transfer date, or the date the first payment is due to the new servicer. Each closed loan submitted for purchase must include a sample copy of the Goodbye Letter you will use, upload to BlitzDocs, with the following (or substantially similar) verbiage incorporated into the letter: "This is a sample Goodbye Letter. The actual letter will be sent to the Mortgagor(s) once the loan funds, but no later than 15 calendar days prior to the first payment due to the new servicer." The actual letter sent to the Mortgagor should be prepared and sent to the Mortgagor only after you have received our purchase confirmation, which will indicate the first payment due to the Master Servicer, M&T Bank. Within five (5) business days of the Purchase Date, you must upload to BlitzDocs a copy of the actual Goodbye Letter sent to the Mortgagor(s) along with a copy of the loan payment history up to the transfer date. If we do not receive confirmation that payments due were received promptly, the loan may be referred to our Quality Control Department for early payment delinquency review. Goodbye Letter A sample Goodbye Letter is attached. You may use the exact language in this sample or from your own Goodbye Letter, if it is substantially similar; meets all the requirements of RESPA; and includes the following required content: The name and address of all Mortgagor(s). The name, address, and toll-free number of the new servicer, M&T Bank. The M&T Bank loan number, with instructions to include this loan number on all correspondence. The effective date of the transfer, which is the date the first payment is due to M&T Bank. The date on which you, the Lender, will no longer accept payments. The payment address for M&T Bank to send future payments. Information relating to the continued availability of mortgage life, disability, or other optional insurance and whatever action, if any, the Mortgagor may take to maintain coverage. The statement that the transfer does not affect the terms or security instruments of the Mortgage Loan. All Goodbye Letters must be prepared on the Lender s letterhead and must be dated and mailed to the Mortgagor no later than the day the letter is generated. Tax Service Fee Lenders transferring servicing to M&T should not set up a tax service for the loans, but instead collect an $87.50 tax service fee at closing, that will be net funded by SONYMA at the time of loan purchase. M&T will set up the tax service upon transfer of the servicing. No tax service fee is required for cooperative loans. SONYMA EXPRESS SUPPORT Effective immediately, requests for technical support, including password resets, error messages, issues with loan registration, etc., should be ed to SESupport@nyshcr.org. This mailbox is monitored by a team to Page 3 of 6 Bulletin

4 ensure rapid responses to your SONYMA Express questions. This is not to be used loan status requests or for non-sonyma Express related matters. HABITAT FOR HUMANITY EXTENDED INTEREST RATE LOCK PERIOD Effective immediately, SONYMA will automatically extend the interest rate for 120 days for all requests to extend rate locks on Habitat for Humanity loans. This will reduce paperwork and the need for multiple extension requests for the same transaction. EXPANSION OF THE NEIGHBORHOOD REVITALIZATION PROGRAM Effective immediately, the Neighborhood Revitalization Program will be available in Kings and New York counties. EXPANSION OF THE GRADUATE TO HOMEOWNERSHIP PROGRAM Effective immediately, the Graduate to Homeownership Program has been expanded to include availability in the following cities: Capital Region Albany Central NY Auburn Finger Lakes Penn Yan Mid-Hudson New Rochelle Mohawk Valley Amsterdam North Country Saranac Lake Southern Tier Owego Western NY - Lockport As always, we thank you for your partnership. Please don t hesitate to contact me or your Business Development Officer if you have any questions or concerns about these changes. Sincerely, Sherri Eckles Senior Vice President, Single Family Programs Page 4 of 6 Bulletin

5 SAMPLE [Company Letterhead] [Date] [Mortgagor s Name and Mailing Address] RE: [Loan number] NOTICE OF ASSIGNMENT, SALE OR TRANSFER OF SERVICING RIGHTS Please be advised that the servicing of your mortgage loan, that is, the right to collect payments from you, is being assigned, sold or transferred. M&T Bank will begin servicing your loan effective with your payment due [Due Date]. The first payment that is due to M&T bank will be due on this date. The original terms and conditions of your Mortgage Loan will remain the same. M&T Bank will be contacting you to acknowledge this transfer and provide you with their Mortgage Account Statement. If you have not received a statement before your above stated scheduled payment is due, please write your social security number and loan number on your check and remit your payment to the following address: M&T Bank P.O Box Baltimore MD This transfer will not affect your homeowners/hazard insurance. A notification is being sent to your hazard insurance carrier to send future insurance information to M&T Bank. If you are currently on automatic payment withdrawal, M&T Bank can offer this service for your convenience. Please contact M&T Bank for further instructions. If you are currently making your mortgage payment through government allotment or have established a third party relationship to automatically make payments on your behalf (other than automatic draft through your personal checking or savings account), please ensure you take the necessary steps to advise the payor of your new loan number and change the payee to M&T Bank. You should also be aware of the following information, which is set out in more detail in section 6 of the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2605): During the 60-day period following the effective date of the transfer of the loan servicing, a loan payment received by your old servicer before its due date may not be related by M&T Bank as late, and a late fee may not be imposed on you. Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you send a qualified written request to your loan servicer concerning the servicing of your loan, your servicer must provide you with a written acknowledgement within 20 business days of receipt of your request. A qualified written request is a written correspondence, other than notice on a payment Page 5 of 6 Bulletin

6 coupon or other payment medium supplied by the servicer, which includes your name and account number, and your reasons for the request. If you wish to send a qualified written request regarding the current servicing of your loan, please send it to the following address: [Originating Lenders Name] [Address] [City, State ZIP] Not later than 60 business days after receiving your request, your servicer must make any appropriate corrections to your account, and must provide you with a written clarification regarding any dispute. During this 60-business day period, your servicer may not provide information to a consumer reporting agency concerning any overdue payment related to such period or qualified written request. However, this does not prevent the servicer from initiating foreclosure if proper grounds exist under the mortgage documents. A business day is a day on which the offices of the business entity are open to the public for carrying on substantially all of its business functions. Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals in circumstances where servicers are shown to have violated the requirements of that section. You should seek legal advice if you believe your rights have been violated. Future inquiries regarding the Servicing of your loan should be directed to M&T Bank. Their correspondence address and toll-free telephone number are as follows: M&T Bank Customer Service Department P.O. Box 1288 Buffalo, NY Toll Free Telephone number Customer Service Hours Monday-Thursday 8:30 a.m. 5:00 p.m. (ET) It has been our pleasure to service your Mortgage Loan, and we wish you a successful relationship with M&T Bank. If you have any questions regarding the transfer, please call [Originating Lender s Company Name] Customer Service Department; toll free at [Originating Lender s Toll-Free Number]. Thank you. Note to Lenders: Please complete the areas in [brackets]. Page 6 of 6 Bulletin