NCUA Releases Additional Regulatory Alerts on Mortgage Servicing Rules

The National Credit Union Administration (NCUA) has released two regulatory alerts regarding the new Mortgage Servicing Requirements:  14-RA-03 covers the requirements under the Truth in Lending Act (TILA), while 14-RA-04 covers the requirements under the Real Estate Settlement Procedure Act (RESPA).

If your credit union services mortgage loans, you must comply with CFPB’s new Truth In Lending Act (TILA) Mortgage Servicing rule for certain mortgage loans.

The TILA Mortgage Servicing rule requires:

  1. Periodic statements for closed-end mortgage loans;
  2. New and revised disclosures for certain adjustable-rate mortgages (ARMs); and
  3. Prompt crediting of mortgage payments and responding to requests for payoff amounts.

Small servicers are exempt from only the first part of the rule — the periodic statement requirement.

Your credit union is a small servicer if you, together with any affiliates, service 5,000 or fewer mortgages, and you (or an affiliate) are the creditor or assignee for all of them.

In addition, if your credit union services mortgage loans, you must comply with CFPB’s new Real Estate Settlement Procedures Act (REPSA) Mortgage Servicing rule for certain mortgage loans.

The RESPA Mortgage Servicing rule addresses:

  1. Force-placed insurance;
  2. Error resolution and information requests;
  3. General servicing policies, procedures, and requirements;
  4. Early intervention with delinquent members;
  5. Continuity of contact with delinquent members; and
  6. Loss mitigation.

Small servicers are exempt from only certain parts of the rule, as discussed throughout the regulatory alert.

Your credit union is a small servicer if you, together with any affiliates, service 5,000 or fewer mortgages, and you (or an affiliate) are the creditor or assignee for all of them.

Specifically, small servicers are exempt from:

  • The prohibition on purchasing force-placed insurance, where a servicer could continue the member’s existing hazard insurance coverage by advancing funds to escrow, under certain circumstances when the cost of force-placed insurance is less than the cost of advancing for hazard insurance;
  • The general servicing policies, procedures, and requirements provision;
  • The early intervention provision; and
  • The majority of the loss mitigation provision.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance.