UPDATE ON MORTGAGE SERVICING & APPRAISAL GUIDELINES

Transcription

1 THURSDAY OCTOBER 17, PM CENTRAL TIME UPDATE ON MORTGAGE SERVICING & APPRAISAL GUIDELINES Agata Maurer Senir Managing Cnsultant BKD, LLP amaurer@bkd.cm Wanda Andersn Senir Managing Cnsultant BKD, LLP wandersn@bkd.cm TO RECEIVE CPE CREDIT Individual Attendee Participate in entire webinar Answer plls when they are prvided Grup Attendees Cmplete grup attendance frm with Title & date f live webinar Yur cmpany name Yur printed name, signature & address All grup attendance sheets must be submitted t training@bkd.cm within 24 hurs f live webinar Answer plls when they are prvided If all eligibility requirements are met, each participant will be ed a CPE certificate within 15 business days f live webinar 2 1

2 THURSDAY OCTOBER 17, PM CENTRAL TIME UPDATE ON MORTGAGE SERVICING & APPRAISAL GUIDELINES Agata Maurer Senir Managing Cnsultant BKD, LLP amaurer@bkd.cm Wanda Andersn Senir Managing Cnsultant BKD, LLP wandersn@bkd.cm MORTGAGE SERVICING GENERAL OVERVIEW Mrtgage Servicing Rules Tw Rules / 11 Tpics (Effective January 10, 2014) TILA - Regulatin Z Tpic 1: Peridic statements Small Servicer Exemptin Tpic 2: Interest rate adjustment ntices fr Adjustable Rate Mrtgages Tpic 3: Prmpt crediting f payments & payff statements 3 2

3 GENERAL OVERVIEW RESPA - Regulatin X Tpic 4: Frce-placed insurance Tpic 5: Errr reslutin & infrmatin requests Tpic 6: General servicing plicies, prcedures, & requirements Small Servicer Exemptin Tpic 7: Early interventin with delinquent brrwers Small Servicer Exemptin Tpic 8: Cntinuity f cntact with delinquent brrwers Small Servicer Exemptin 4 GENERAL OVERVIEW Tpic 9: Lss mitigatin prcedures Small Servicer Exemptin, except may nt make first ntice t freclse r file t freclse unless 1) cnsumer is ver 120 days delinquent r freclsure is based n brrwer's vilatin f due-n-sale clause r servicer is jining in freclsure actin f subrdinate lien hlder 2) brrwer is nt perfrming under terms f a lss mitigatin agreement Tpic 10: Timely Escrw Payments & Refund f Escrw Balance Tpic 11: Mrtgage Servicing Transfer Disclsures 5 3

4 SMALL SERVICER DEFINITION A Small Servicer services 5,000 r fewer mrtgage lans, fr all f which the servicer (r an affiliate) is the creditr r assignee; r is a Husing Finance Agency as defined by HUD regulatins (24 CFR 266.5) Nte: If yu service any mrtgage lans yu (r an affiliate) did nt riginate r d nt wn, yu d nt qualify as a small servicer, even if yu service 5,000 r fewer lans verall 6 SMALL SERVICER DEFINITION Small Servicer Determinatin Made as f January 1 st f each year A servicer that crsses the "5,000 r less" threshld, has six mnths r until the next January 1 st (whichever is later) t cmply with any requirements fr which the servicer is n lnger exempt as a small servicer 7 4

5 REG Z: PERIODIC STATEMENT FOR CLOSED-END MORTGAGES Peridic Statements fr Clsed-End Mrtgages Requires peridic statements n clsed-end mrtgage lans r cupn bks meeting requirements fr fixed-rate mrtgages Cverage- applies t a clsed-end, cnsumer credit transactin secured by a dwelling (referred t as mrtgage lans in sectin ) 8 REG Z: PERIODIC STATEMENT FOR CLOSED-END MORTGAGES Exemptins Small Servicer (if servicer qualifies under the small servicer exemptin) Timeshares Reverse Mrtgages Fixed-rate mrtgage lans where a cupn bk is prvided, as lng as specified infrmatin included in the cupn bk, ther infrmatin prvided t the cnsumer upn request, & delinquency infrmatin fr the specified lan is prvided in writing fr each billing cycle where the cnsumer is 45 days r mre delinquent 9 5

6 REG Z: PERIODIC STATEMENT FOR CLOSED-END MORTGAGES Timing f peridic statement- delivered r placed in the mail n later than fur days frm the clse f the curtesy perid prvided fr the prir billing cycle Electrnic delivery with cnsumer s affirmative cnsent is permissible Frmat- Sample peridic frms are lcated in Appendix H-30 f Reg Z 10 REG Z: INTEREST RATE ADJUSTMENT NOTICES FOR ARMS General Adds an initial interest rate disclsure fr ARMs (aka Initial ARM Disclsure ) Revises the existing requirements fr interest rate adjustment disclsures fr ARMs with r withut a crrespnding change in payment (aka Onging ARM Disclsure ) Cverage Clsed-end, cnsumer credit transactin secured by cnsumer s principal dwelling where the annual percentage rate may increase after cnsummatin Exemptin ARMs with terms f ne year r less 11 6

7 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS - INITIAL Initial Disclsure shall include Date f the disclsure Statement with an explanatin f changes in the payment & lan terms, & when rate adjustments will ccur Table f current & new interest rates & payments (r an estimate f the new rate & new payment) Explanatin f hw the interest rate is determined 12 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS INITIAL Initial Disclsure shall include Any limits n the interest rate r payment increases at each interest rate adjustment & ver the life f the lan, as applicable, including the extent t which limits result in the creditr, assignee, r servicer freging any increase in interest rate & the earliest date that such fregne interest rate increases may apply t future interest rate adjustments (subject t thse limits) Explanatin f hw new payment is determined, including index r frmula used 13 7

8 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS INITIAL Initial Disclsure shall include Circumstances under which prepayment penalties may be impsed Telephne number fr cnsumers t call the creditr, assignee, r servicer if they anticipate nt being able t make their new payments List f alternatives t paying at the new rate, including refinancing r mdifying lan terms Website fr hmewnership cunselrs Other disclsures as applicable 14 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS INITIAL Cntent requirements fr the initial interest rate adjustment disclsure can be fund under 12 CFR (d)(2) Frmat: Appendix H, frms H-4(D)(3) & (4) Timing: Shall be prvided at least 210 days but nt mre than 240 days prir t the first payment at the adjusted level is due UNLESS the first payment adjustment is due within the first 210 days frm cnsummatin. In this case the disclsure shall be prvided at cnsummatin 15 8

9 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS INITIAL Mdel Frm H- 4(D)(4) 16 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS - ONGOING Eliminates annual ntice currently required when interest rate adjusts during the curse f a year withut a crrespnding change in payment Revises current disclsure when an interest adjustment results in a crrespnding change in payment 17 9

10 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS ONGOING Revised, Onging disclsure shall include Statement with an explanatin f changes in the payment & lan terms, & when rate adjustments will ccur Table f current & new interest rates & payments (r an estimate f the new rate & new payment) Explanatin f hw the interest rate is determined Any limits n the interest rate r payment increases at each interest rate adjustment & ver the life f the lan, as applicable, including the extent t which limits result in the creditr, assignee, r servicer freging any increase in interest rate & the earliest date that such fregne interest rate increases may apply t future interest rate adjustments (subject t thse limits) 18 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS ONGOING Revised, Onging disclsure shall include (cntinued) Explanatin f hw new payment is determined, including index r frmula used Circumstances under which prepayment penalties may be impsed; Telephne number fr cnsumers t call the creditr, assignee, r servicer if they anticipate nt being able t make their new payments Other disclsures as applicable 19 10

11 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS ONGOING Cntent requirements fr the nging interest rate adjustment disclsure can be fund under 12 CFR (c)(2) Frmat: Appendix H, frms H-4(D)(1) & (2) 20 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS ONGOING Timing: The interest rate adjustment disclsure shall be prvided at least 60, but nt mre than 120 days prir t the first payment at the adjusted level is due Fr ARMs with unifrmly scheduled adjustments ccurring every 60 days r mre frequently & fr ARMS riginated prir t January 10, 2015 in which the lan cntract requires the adjusted interest rate & payment t be calculated based n the index figure available as f a date that is less than 45 days prir t the adjustment date, disclsure shall be prvided at least 25, but nt mre than 120 days prir t the first payment at the adjusted level is due Fr ARMs with an ccurrence f the first rate adjustment within 60 days f lan cnsummatin where the new interest rate disclsed at cnsummatin was an estimate, disclsure shall be prvided as sn as is practical, but nt less than 25 days prir t the first payment at the adjusted level is due 21 11

12 REG Z: INTEREST RATE ADJUSTMENT NOTICE FOR ARMS ONGOING Mdel Frm H- 4(D)(1) 22 REG Z: PROMPT CREDITING OF PAYMENTS & PAYOFF STATEMENTS Prmpt Crediting f Payments Applies t all clsed-end & pen-end cnsumer lans/lines f credit secured by cnsumer s principal dwelling Payments must be credited as f the date f receipt, except when delay des nt result in negative cnsequences fr brrwer {(reasnable cutff time f 5 p.m. (r bank s clsing time allwed)} Requires certain prcedures fr handling partial payments 23 12

13 REG Z: PROMPT CREDITING OF PAYMENTS & PAYOFF STATEMENTS Payff Statements Applies t all clsed-end & pen-end cnsumer lans/lines f credit secured by cnsumer s dwelling Payffs must be quted within seven business days f receiving the written request 24 REG X: FORCE-PLACEMENT OF HAZARD INSURANCE Hazard insurance is nt - Fld insurance required by Fld Disaster Prtectin Act f 1973 Hazard insurance btained by a brrwer but renewed by a servicer (i.e., thrugh escrw disbursement) 25 13

14 REG X: FORCE-PLACEMENT OF HAZARD INSURANCE Basis fr charging fee - servicer may nt assess a premium fee r related charge fr frce-placing hazard insurance unless servicer has a reasnable basis t believe that brrwer has failed t maintain hazard insurance in accrdance with lan cntract's requirement servicer has prvided a written ntice in required frm (MS-3A) at least 45 days prir t assessing a charge r fee t brrwer servicer has prvided a secnd & final ntice in the required frm (MS-3B & MS-3C) n earlier than 30 days after first ntice & at least 15 days prir t assessing a charge r fee t the brrwer The disclsures cannt be cmbined with ther disclsures, but can be mailed alng with ther dcuments as lng as ntice is n separate piece f paper 26 REG X: FORCE-PLACEMENT OF HAZARD INSURANCE Requirements befre charging a fee fr renewal/replacement f existing frce place plicies A written 45-day ntice in the required frm (servicer may use mdel MS-3D in appendix MS-3) Cancellatin f frce-placed insurance- within 15 days f receiving evidence demnstrating sufficient hazard insurance cverage that cmplies with the lan cntract s requirements, a servicer must cancel the frce-placed insurance, & refund premiums r ther charges assciated with the frce-placed insurance where cverage frm the brrwer s plicy verlapped the servicer s plicy 27 14

15 REG X: ERROR RESOLUTION / INFORMATION REQUESTS Errr Reslutin Ntice f errr- a qualified written request that asserts an errr relating t the servicing f a mrtgage lan is a ntice f errr fr purpses f reslving an errr. A ntice n a payment cupn r ther payment frm need nt be treated as an errr Categries f errrs accepting payments applying payments crediting payments paying escrwed items refunding escrw balances impsing fees prviding payff balances prviding lss mitigatin ptins transferring servicing filing f freclsure ntice mving fr freclsure judgment r sale r any ther errr relating t the servicing f a brrwer s mrtgage lan 28 REG X: ERROR RESOLUTION / INFORMATION REQUESTS Errr Reslutin / Infrmatin Request Prcedures Cntact infrmatin- prvide brrwer with cntact infrmatin fr asserting errrs r making infrmatin Acknwledgement - prvide brrwer ntice within five days* f assertin f errr r infrmatin request Early respnse- if servicer prvides brrwer with the infrmatin requested & cntact infrmatin including a telephne number within 5 days* frm receiving an errr ntice r infrmatin request, servicer is nt required t prvide the acknwledgement f receipt r further respnse f findings Respnse - cnduct investigatin & prvide respnse (descriptin f crrectin r that n errr ccurred & reasn(s), effective date f crrectin as applicable, right t request dcumentatin as applicable, & Bank s cntact infrmatin) *Excluding legal public hlidays, Saturdays & Sundays 29 15

16 REG X: ERROR RESOLUTION / INFORMATION REQUESTS Timing limitatins Fr errrs regarding failure t prvide a timely written payff 7 days* Fr errrs regarding the filing f a freclsure prcess, judgment, r sale prir t freclsure sale r 30 days after receipt f asserted errr, whichever is earlier Fr infrmatin requests regarding the identity, address, r ther cntact infrmatin fr the wner r assignee f the mrtgage lan, the servicer shall prvide respnse n later than 10 days* frm receiving the infrmatin request Fr all ther errrs & infrmatin requests n later than 30 days* frm receipt f the errr ntice r infrmatin request a servicer can extend the ntice f the results f the investigatin by 15 days* if a written ntice is prvided t the brrwers befre the end f the 30-day perid specifying the reasn(s) fr the extensin 30 REG X: ERROR RESOLUTION / INFORMATION REQUESTS Prhibited infrmatin requests - servicer may request supprting dcumentatin fr the asserted errr, but cannt Require such dcuments as a cnditin f investigating an asserted errr Determine that n errr ccurred due t a failure f the brrwer t prvide such dcumentatin withut cnducting an investigatin 31 16

17 REG X: ERROR RESOLUTION / INFORMATION REQUESTS Prviding cpies t brrwers when n errr ccurred Servicers shall prvide the brrwer cpies f dcumentatin & infrmatin relied upn in making the determinatin within 15* days Cnfidential, prprietary, r privileged infrmatin can be withheld but a written ntice must be prvided within 15 days* f receipt f brrwer request fr such dcuments N charge r fee may be assessed fr prviding cpies 32 REG X: GENERAL SERVICING POLICIES, PROCEDURES, & REQUIREMENTS Cverage - clsed-end mrtgage lans secured by a first-lien n a prperty that is a brrwer's principal residence Exemptins - Servicers that qualify under the small servicer exemptin are exempt frm this requirement 33 17

18 REG X: GENERAL SERVICING POLICIES, PROCEDURES, & REQUIREMENTS Reasnable plicies & prcedures- a servicer must maintain plicies & prcedures that are reasnably designed t achieve the fllwing bjectives Accessing & prviding timely accunt infrmatin Prperly evaluating lss mitigatin ptins Facilitating versight f, & cmpliance by service prviders Facilitating transfer f infrmatin during servicing transfers Infrming brrwers f the written errr reslutin & infrmatin request prcedures 34 REG X: GENERAL SERVICING POLICIES, PROCEDURES, & REQUIREMENTS Recrd retentin - servicers must retain recrds that dcument actins taken with respect t a brrwer s mrtgage lan accunt until ne year after the date a mrtgage lan is discharged r servicing f a mrtgage lan is transferred 35 18

19 REG X: GENERAL SERVICING POLICIES, PROCEDURES, & REQUIREMENTS Servicing file - servicers shall maintain the fllwing dcumentatin & data n each mrtgage lan accunt serviced in a manner that facilitates cmpiling such dcuments & data int a servicing file within five days Schedule f all transactins credited & debited, including any escrw & suspense accunts Cpy f the security instrument Cmmunicatin ntes abut the mrtgage accunt created by servicer persnnel Reprt f data fields by name (t the extent applicable) Cpies f any infrmatin r dcumentatin prvided by brrwer (in accrdance with errr reslutin & lss mitigatin prcedures) 36 REG X: EARLY INTERVENTION WITH DELINQUENT BORROWERS Cverage clsed-end mrtgage lans secured by a first-lien n a prperty that is a brrwer's principal residence Exemptins - Servicers that qualify under the small servicer exemptin are exempt frm this requirement Requirements Live cntact - gd faith effrts t establish live cntact with a delinquent brrwer n r befre the 36 th day f their delinquency t infrm the brrwer f lss mitigatin ptins, if apprpriate Written ntice- n r befre the 45 th day f a brrwer s delinquency, a servicer shall prvide a written early interventin ntice with the required cntent Servicer may use mdel clauses MS-4(A), (B), & (C ) in appendix MS

20 REG X: CONTINUITY OF CONTACT WITH DELINQUENT BORROWERS Cverage- clsed-end mrtgage lans secured by a first-lien n a prperty that is a brrwer's principal residence Exemptins - Servicers that qualify under the small servicer exemptin are exempt frm this requirement Plicies & prcedures - servicer must maintain plicies & prcedures reasnably designed t meet the bjectives 38 REG X: CONTINUITY OF CONTACT WITH DELINQUENT BORROWERS Requirements - Assign persnnel (single persn r team) t delinquent brrwer by the time servicer prvides brrwer early interventin ntice but n later than the 45th day f the brrwer s delinquency Assigned persnnel available by telephne t respnd t inquiries & assist brrwer with lss mitigatin (as applicable) until brrwer has made tw cnsecutive mrtgage payments under the terms f a permanent lss mitigatin agreement If brrwer des nt receive immediate live respnse frm assigned persnnel, ensure servicer can prvide live respnse in a timely manner 39 20

21 REG X: LOSS MITIGATION PROCEDURES Lss Mitigatin - Alternative t freclsure ffered by the wner r assignee f a mrtgage lan that is made available thrugh the servicer t the brrwer Cverage clsed end mrtgage lans secured by a first-lien n a prperty that is a brrwer's principal residence 40 REG X: LOSS MITIGATION PROCEDURES Exemptins - Servicers that qualify under the small servicer exemptin are exempt frm these requirements, except they shall nt Make the first ntice r filing required t freclse unless a cnsumer s mrtgage lan bligatin is mre than 120 days delinquent Mve fr freclsure judgment r rder f sale, r cnduct a freclsure sale, if a cnsumer is perfrming pursuant t the terms f a lss mitigatin agreement 41 21

22 REG X: LOSS MITIGATION PROCEDURES Receipt f lss mitigatin applicatin - Cmplete applicatin- servicer shall acknwledge receipt by ntifying brrwer in writing within five days* f receipt Incmplete applicatin- servicer shall acknwledge receipt by ntifying brrwer in writing within five days* & state additinal dcuments & infrmatin the brrwer must submit t make the applicatin cmplete. Ntice must include a statement that the brrwer shuld cnsider cntacting servicers f any ther mrtgage lans secured by the same prperty t discuss available lss mitigatin ptins. If the servicer has exercised reasnable diligence in btaining dcuments & infrmatin t cmplete an applicatin withut prgress by the brrwer, the servicer can evaluate the applicatin & ffer a brrwer a lss mitigatin ptin *Excluding legal public hlidays, Saturdays & Sundays 42 REG X: LOSS MITIGATION PROCEDURES Review f lss mitigatin applicatin - if a servicer receives a lss mitigatin applicatin 45 days r mre befre a freclsure sale a servicer shall: Prmptly review the applicatin t determine if it is cmplete Ntify the brrwer in writing within five days* after receiving the applicatin t acknwledge receipt & state whether cmplete r incmplete. If incmplete, state items brrwer must submit t make the applicatin cmplete & include date by which any dcument submitted wuld be cnsidered stale r invalid based n requirements under the lss mitigatin ptins available t brrwer. This shuld be the earliest f the fllwing dates: date that is the brrwer s 120 th date f delinquency, date that is 90 days preceding a freclsure sale, r date that is 38 days preceding a freclsure sale Make statement that brrwer shuld cntact ther servicers fr any ther mrtgage lans secured by the same prperty t discuss available lss mitigatin ptins 43 22

23 REG X: LOSS MITIGATION PROCEDURES Evaluatin f lss mitigatin applicatin - if a servicer receives a cmplete lss mitigatin applicatin mre than 37 days befre a freclsure sale, the servicer has within 30 days f receipt t Evaluate the brrwer fr all lss mitigatin ptins available t the brrwer Prvide the brrwer with a written ntice stating the servicer s determinatin f which lss mitigatin ptins (if any) it will ffer t the brrwer n behalf f the wner r assignee f the mrtgage 44 REG X: LOSS MITIGATION PROCEDURES Denial f mdificatin ptins - if the cmpleted lss mitigatin applicatin is denied fr any trial r permanent mdificatin ptin available t the brrwer, a servicer shall state in a ntice t the brrwer The specific reasns fr the servicer s determinatin fr each ptin available The brrwer may appeal the determinatin, the deadline dates t appeal such determinatin, & any requirements fr making an appeal 45 23

24 REG X: LOSS MITIGATION PROCEDURES Brrwer respnse & acceptance f lss mitigatin ptins If a cmplete lss mitigatin applicatin is received 90 days r mre befre a freclsure sale, a servicer may require that a brrwer accept r reject an ffer n earlier than 14 days after the ptin was prvided t the brrwer If a cmplete lss mitigatin applicatin is received between days befre a freclsure sale, the servicer may require the brrwer t accept r reject an ffer n earlier than seven days after the ptin was prvided t the brrwer 46 REG X: LOSS MITIGATION PROCEDURES Rejectin if a brrwer des nt satisfy the servicer s requirements fr accepting a trial lan mdificatin plan, but submits the payment that wuld be wed pursuant t any such plan within the brrwer respnse deadline, the brrwer shall be prvided a reasnable perid f time t fulfill any remaining requirements f the servicer fr acceptance f the trial mdificatin beynd the deadlines established under the brrwer respnse time if a brrwer makes an appeal, the deadline fr accepting a lss mitigatin ptin ffered shall be extended until 14 days after the servicer prvides the ntice f the appeal determinatin, therwise a servicer may deem a brrwer that has nt accepted an ffer f a lss mitigatin ptin within the brrwer respnse timeframes as rejecting the ffer f a lss mitigatin ptin 47 24

25 REG X: LOSS MITIGATION PROCEDURES 120-Day Pause Servicer must wait until a lan is mre than 120 days delinquent befre making first ntice r filing required fr freclsure Servicer als restricted if brrwer has already submitted cmplete lan mdificatin applicatin by the applicable deadline & is pending review If brrwer is perfrming under a lss mitigatin agreement, trial mdificatin r ther agreed-upn ptin, servicer cannt begin freclsure prcess If freclsure prcess has started & brrwer submits a cmplete lss mitigatin applicatin mre than 37 days befre a freclsure sale, a servicer must nt mve fr freclsure judgment r rder f sale, r cnduct a freclsure sale unless The servicer has sent the lss mitigatin ptins ntice t the brrwer The brrwer has rejected all lss mitigatin ptins ffered t them The brrwer has failed t perfrm under a lss mitigatin ptin 48 REG X: LOSS MITIGATION PROCEDURES Appeal prcess Brrwer may appeal servicer denial f any trial r permanent lan mdificatin available if cmplete applicatin received 90 days r mre befre freclsure sale (r during 120-day pause) Brrwer has 14 days t appeal after servicer prvides ntice f ffer Appeals must be reviewed by persnnel ther than thse wh evaluate the cmplete lss mitigatin applicatin 49 25

26 REG X: LOSS MITIGATION PROCEDURES Appeal determinatin Within 30 days f brrwer making an appeal, servicer is required t prvide written ntice t brrwer stating servicer s determinatin f whether servicer will ffer brrwer lss mitigatin ptin based n appeal Servicer may require brrwer accept r reject this ffer n earlier than 14 days after prviding ntice Servicer is nt required t review duplicative appeals 50 REG X: TIMELY ESCROW PAYMENTS & REFUND OF ESCROW BALANCE Timely Escrw Payments - the servicer shall make payments frm the escrw accunt in a timely manner, which means n r befre the deadline t avid a penalty Refund f Escrw Balance - generally within 20 days* f a brrwer s lan being paid in full, a servicer shall return any amunts remaining in an escrw accunt that is within the servicer s cntrl t the brrwer 51 26

27 REG X: TIMELY ESCROW PAYMENTS & REFUND OF ESCROW BALANCE Crediting remaining escrw balance t a new escrw accunt - if brrwer agrees, servicer may credit any amunts remaining in escrw accunt fr a new mrtgage lan as f settlement date if new mrtgage lan is prvided t brrwer by lender that Was prir lender t whm lan was initially payable Is wner r assignee f prir mrtgage (lan being refinanced) Uses same servicer t service new lan that serviced prir mrtgage 52 REG X - MORTGAGE SERVICING TRANSFER DISCLOSURES Ntice f Transfer f Lan Servicing (any first-lien mrtgage lan) within three days f applicatin, servicer must prvide cnsumer with servicing disclsure statement (Mdel - Appendix MS-1 f Regulatin X) Disclsure must state whether servicing f mrtgage lan may be assigned, sld, r transferred t any ther persn at any time Servicers are n lnger required t include statement in required ntice regarding brrwer s rights under cmplaint reslutin prcess 53 27

28 REG X - MORTGAGE SERVICING TRANSFER DISCLOSURES Treatment f payments made during transfer perid During 60-day perid frm effective date f transfer f servicing f any mrtgage lan, if transferr servicer receives payment n r befre due date (including any grace perid allwed under the agreement), payment may nt be treated late Transferr has tw ptins when payments received frm a brrwer after an accunt has been transferred t transferee: 1) transfer payment t transferee servicer fr applicatin t brrwer s lan accunt r 2) return payment t persn that made payment & ntify such persn f prper recipient f payment 54 NEXT STEPS FOR MORTGAGE SERVICING All servicers Ensure cre system in cmpliance with Initial & Onging ARM ntices Ensure prmpt crediting f payments as f date f receipt as required Ensure prmpt payff statements as required Establish frce-placement letters & prcedures fr hazard insurance Establish errr reslutin & infrmatin request prcedures Establish lss mitigatin prcedures, as applicable Train emplyees Bard cmmunicatin 55 28

29 NEXT STEPS FOR MORTGAGE SERVICING Additinally, fr servicers wh d nt meet the small servicer exemptin Ensure cre system in in cmpliance with peridic statements Establish early interventin prvisins Establish cntinuity f cntact prvisins Adpt required plicies & prcedures fr Reg X & Reg Z 56 APPRAISALS RULES Disclsure & Delivery Requirements fr Cpies f Appraisals & Other Written Valuatins Under the Equal Opprtunity Act (Regulatin B s ) Appraisals fr Higher-Priced Mrtgage Lans Truth In Lending Act (Regulatin Z s ) 57 29

30 REG B: APPRAISAL RULES Effective January 18, 2014 Cverage - Applies t cnsumer & business purpse & clsed- & pen-end secured by first lien n ne-t-fur unit dwelling Ntificatin: Creditrs must ntify applicants within three business days f receipt f an applicatin f their right t receive a cpy f all written appraisals r ther written valuatins develped in cnnectin with their applicatin We may rder an appraisal t determine the prperty s value & charge yu fr this appraisal. We will prmptly give yu a cpy f any appraisal, even if yur lan des nt clse. Yu can pay fr an additinal appraisal fr yur wn use at yur wn cst. Sample Frm C-9 in Appendix C f Regulatin B satisfies ntice requirements f bth Regulatin B s & Regulatin Z s ntice requirements 58 REG B: APPRAISAL RULES Cpy f reprt - a creditr shall prvide t the applicant a cpy f each written appraisal reprt r ther valuatin N later than three business days prir t cnsummatin f the lan; r In the case f a lan that is nt cnsummated, n later than 30 days after the creditr determines that the lan will nt be cnsummated r the accunt will nt be pened Waiver - applicants permitted t waive this requirement, hwever applicant must be prvided a cpy f all appraisals & ther written valuatins at r prir t cnsummatin, r n later than 30 days after the creditr determines the transactin will nt be cnsummated 59 30

31 REG B: APPRAISAL RULES Free Cpy: Creditr is nt permitted t charge an applicant fr prviding a cpy f an appraisal & ther written valuatin Appraisal Fee: Creditrs are permitted t charge applicants a reasnable fee t reimburse the creditr fr the cst f the appraisal r valuatin unless therwise prvided by law 61 REG Z: APPRAISAL RULES FOR HPMLS Effective January 18, 2014 Cverage: Reg Z cvered, clsed-end cnsumer credit transactins secured by the cnsumer s principal dwelling that are nt Qualified Mrtgage lans & whse APRs exceed Lans f $417,000 r less: 1.5 percentage pints ver APOR Secured by new manufactured hme Secured by mbile hme, bat r trailer Qualified Mrtgages Exemptins HELOCs Bridge Lan f 12 mnths r less Lans ver $417,000: 2.5 percentage pints ver APOR Subrdinate lien lans: 3.5 percentage pints ver APOR Financing initial cnstructin f dwelling 62 31

32 REG Z: APPRAISAL RULES FOR HPMLS Ntificatin & Cpy f Reprt - same as Reg B, except there is n waiver prvisin under Reg Z Appraisal reprt must be btained Appraiser must cnduct a physical prperty visit f interir f prperty Written appraisal must be perfrmed by a licensed r certified appraiser Prvisin fr secnd appraisal frm an appraiser independent f the first appraiser fr "flips Secnd appraisal must include analysis f difference in sale prices, changes in market cnditins, & imprvements made t the prperty between the date f the previus sale & the current sale Cst f additinal appraisal may nt be charged t applicant 63 NEXT STEPS FOR APPRAISAL GUIDELINES Establish prvisins fr Appraisal Ntice within three business days f applicatin Establish prvisins fr prviding applicant with cpy f appraisal r ther written valuatins in cmpliance with Regs B & Z Establish prvisins fr rdering appraisals in cmpliance with Reg Z fr HPMLs secured by cnsumer s principal dwelling Adpt required plicies & prcedures Train emplyees Bard cmmunicatin 64 32

33 RESOURCES 2013 Real Estate Settlement Prcedures Act (Regulatin X) & Truth in Lending Act (Regulatin Z) Mrtgage Servicing Final Rules Small Entity Cmpliance Guide Mrtgage Servicing Rules Cverage Chart Equal Credit Opprtunity Act (ECOA) Valuatins Rule Small Entity Cmpliance Guide TILS Higher-Priced Mrtgage Lans Appraisal Rule Small Entity Cmpliance Guide Updated-Sticker.pdf 65 QUESTIONS? 33

34 THANK YOU! Agata Maurer Senir Managing Cnsultant Wanda Andersn Senir Managing Cnsultant CONTINUING PROFESSIONAL EDUCATION (CPE) CREDITS BKD, LLP is registered with the Natinal Assciatin f State Bards f Accuntancy (NASBA) as a spnsr f cntinuing prfessinal educatin n the Natinal Registry f CPE Spnsrs. State bards f accuntancy have final authrity n the acceptance f individual curses fr CPE credit. Cmplaints regarding registered spnsrs may be submitted t the Natinal Registry f CPE Spnsrs thrugh its website: The infrmatin in BKD webinars is presented by BKD prfessinals, but applying specific infrmatin t yur situatin requires careful cnsideratin f facts & circumstances. Cnsult yur BKD advisr befre acting n any matters cvered in these webinars

35 CPE CREDIT Up t 1 CPE credit will be awarded upn verificatin f participant attendance; hwever, credits may vary depending n state guidelines Fr questins, cncerns r cmments regarding CPE credit, please the BKD Learning & Develpment Department at training@bkd.cm 69 35