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Mortgage Servicing and Loan Modifications: Section 1024.31 Definitions

Delinquency.

1. Length of delinquency. 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.

Mortgage Servicing and Loan Modifications: 33(a) Servicing disclosure statement.

1. Terminology. Although the servicing disclosure statement must be clear and conspicuous pursuant to § 1024.32(a), § 1024.33(a) does not set forth any specific rules for the format of the statement, and the specific language of the servicing disclosure statement in appendix MS-1 is not required to be used. The model format may be supplemented with additional information that clarifies or enhances the model language.

Mortgage Servicing and Loan Modifications: 33(b) Notices of transfer of loan servicing.

Paragraph 33(b)(3).

1. Delivery. A servicer mailing the notice of transfer must deliver the notice to the mailing address (or addresses) listed by the borrower in the mortgage loan documents, unless the borrower has notified the servicer of a new address (or addresses) pursuant to the servicer’s requirements for receiving a notice of a change of address.

Mortgage Servicing and Loan Modifications: 33(c)(1) Payments not considered late.

1. Late fees prohibited. The prohibition in § 1024.33(c)(1) on treating a payment as late for any purpose would prohibit a late fee from being imposed on the borrower with respect to any payment on the mortgage loan. See RESPA section 6(d) (12 U.S.C. § 2605(d)).

2. Compliance with § 1024.39. A transferee servicer’s compliance with 1024.39 during the 60-day period beginning on the effective date of a servicing transfer does not constitute treating a payment as late for purposes of § 1024.33(c)(1).

Mortgage Servicing and Loan Modifications: 35(a) Notice of error.

1. Borrower’s representative. A notice of error is submitted by a borrower if the notice of error is submitted by an agent of the borrower. A servicer may undertake reasonable procedures to determine if a person that claims to be an agent of a borrower has authority from the borrower to act on the borrower’s behalf, for example, by requiring that a person that claims to be an agent of the borrower provide documentation from the borrower stating that the purported agent is acting on the borrower’s behalf.

Mortgage Servicing and Loan Modifications: 35(b) Scope of error resolution.

1. Noncovered errors. A servicer is not required to comply with § 1024.35(d), (e) and (i) with respect to a borrower’s assertion of an error that is not defined as an error in § 1024.35(b). For example, the following are not errors for purposes of § 1024.35:

i. An error relating to the origination of a mortgage loan;

ii. An error relating to the underwriting of a mortgage loan;

Mortgage Servicing and Loan Modifications: 35(e)(4) Copies of documentation.

1. Types of documents to be provided. A servicer is required to provide only those documents actually relied upon by the servicer to determine that no error occurred. Such documents may include documents reflecting information entered in a servicer’s collection system. For example, in response to an asserted error regarding payment allocation, a servicer may provide a printed screen-capture showing amounts credited to principal, interest, escrow, or other charges in the servicer’s system for the borrower’s mortgage loan account.

Mortgage Servicing and Loan Modifications: 35(g)(1) In general.

Paragraph 35(g)(1)(i).

1. New and material information. A dispute between a borrower and a servicer with respect to whether information was previously reviewed by a servicer or with respect to whether a servicer properly determined that information reviewed was not material to its determination of the existence of an error, does not itself constitute new and material information.

Paragraph 35(g)(1)(ii).

Mortgage Servicing and Loan Modifications: 35(h) Payment requirements prohibited.

1. Borrower obligation to make payments. Section 1024.35(h) prohibits a servicer from requiring a borrower to make a payment that may be owed on a borrower’s account as a prerequisite to investigating or responding to a notice of error submitted by a borrower, but does not alter or otherwise affect a borrower’s obligation to make payments owed pursuant to the terms of a mortgage loan.

Mortgage Servicing and Loan Modifications: 36(a) Information request.

1. Borrower’s representative. An information request is submitted by a borrower if the information request is submitted by an agent of the borrower. A servicer may undertake reasonable procedures to determine if a person that claims to be an agent of a borrower has authority from the borrower to act on the borrower’s behalf, for example, by requiring that a person that claims to be an agent of the borrower provide documentation from the borrower stating that the purported agent is acting on the borrower’s behalf.

Mortgage Servicing and Loan Modifications: 36(d)(1) Investigation and response requirements.

Paragraph 36(d)(1)(ii).

1. Information not available. Information is not available if:

i. The information is not in the servicer’s control or possession, or

ii. The information cannot be retrieved in the ordinary course of business through reasonable efforts.

2. Examples. The following examples illustrate when information is available (or not available) to a servicer under § 1024.36(d)(1)(ii):

Mortgage Servicing and Loan Modifications: 36(f)(1) In general.

Paragraph 36(f)(1)(i).

1. A borrower’s request for a type of information that can change over time is not substantially the same as a previous information request for the same type of information if the subsequent request covers a different time period than the prior request.

Paragraph 36(f)(1)(ii).

Mortgage Servicing and Loan Modifications: 37(c)(1) In general.

Paragraph 37(c)(1)(i).

1. Assessing premium charge or fee. Subject to the requirements of § 1024.37(c)(1)(i) through (iii), if not prohibited by State or other applicable law, a servicer may charge a borrower for force-placed insurance the servicer purchased, retroactive to the first day of any period of time in which the borrower did not have hazard insurance in place.

Paragraph 37(c)(1)(iii).

Mortgage Servicing and Loan Modifications: 37(d)(1) In general.

1. When a servicer is required to deliver or place in the mail the written notice pursuant to § 1024.37(d)(1), the content of the reminder notice will be different depending on the insurance information the servicer has received from the borrower. For example:

Mortgage Servicing and Loan Modifications: 37(d)(5) Updating notice with borrower information.

1. Reasonable time. If the written notice required by § 1024.37(c)(1)(ii) was put into production a reasonable time prior to the servicer delivering or placing the notice in the mail, the servicer is not required to update the notice with new insurance information received. For purposes of § 1024.37(d)(5), a reasonable time is no more than five days (excluding legal holidays, Saturdays, and Sundays).

Mortgage Servicing and Loan Modifications: 37(e)(1) In general.

1. For purposes of § 1024.37(e)(1), as evidence that the borrower has purchased hazard insurance coverage that complies with the loan contract’s requirements, a servicer may require a borrower to provide a form of written confirmation as described in comment 37(c)(1)(iii)-2, and may reject evidence of coverage submitted by the borrower for the reasons described in comment 37(c)(1)(iii)-2.