ACTION: Compliance Required by January 10, 2014 Unless Otherwise Noted
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Periodic statements for closed-end mortgage loans;
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New and revised disclosures for certain adjustable-rate mortgages (ARMs); and
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Prompt crediting of mortgage payments and responding to requests for payoff amounts.
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Together with any affiliates, you service 5,000 or fewer mortgages, and you (or an affiliate) are the creditor or assignee for all of them.5
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Service more than 5,000 loans; or
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Take on the servicing of a loan you do not own or did not originate.
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For loans subject to the periodic billing statement provision, a servicer must provide consumers with a
statement each billing cycle showing, among other things, information on the payment currently due, fees imposed, transaction activity, application of past payments, contact information for the servicer and housing counselors, and, where applicable, information regarding delinquencies. This statement must meet the timing, form, and content requirements provided in the rule. The rule contains sample forms that may be used. Under this section, the term “servicer” includes the creditor, assignee or servicer as applicable.
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Open-end transactions;9
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Reverse mortgages;
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Timeshare loans;
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Fixed-rate loan coupon books meeting the rule’s requirements (coupon books’ requirements are discussed below);
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Loans while the member is a debtor in bankruptcy (also discussed below); and
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Loans serviced by small servicers who meet the rule’s small servicer exemption requirements outlined above.
embers cannot opt out of receiving periodic statements.13 Paper statements can either be mailed or
delivered in person. If a member gives you affirmative consent, you may send periodic statements electronically.14 If you send electronic statements, they must be in a form the member can print or download.15 Instead of sending the statements themselves, you may send a link to an online site where the member can securely access the statements.16 If you are currently sending electronic disclosures for any account (for example, a mortgage or checking account), you do not have to seek affirmative consent from that member again.17
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The amount due (includes payment due date and amount of late fee if payment is late);
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An explanation of the amount due (includes the monthly payment amount and breakdown of how it will be applied to principal, interest, and escrow payment currently due and fees imposed);
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Past payment breakdown (includes total of all payments since the last statement and application to principal, interest, escrow, and fees); and
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A list of all transaction activity since the last statement.
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Contact information, such as toll-free number and email address (if applicable) where members may obtain information about their account;
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Account information, such as outstanding principal balance, current interest rate, and date when that interest rate may change;
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Partial payment information (if applicable);
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Housing counseling information – which must include the CFPB website address that provides access to the list of U.S. Department of Housing and Urban Development (HUD) approved housing counseling agencies: http://www.consumerfinance.gov/mortgagehelp (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) ; and
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Delinquency information if the member is 45 days or more delinquent (such as the date the member became delinquent and a reference to the housing counseling information previously disclosed).
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The coupon book includes certain required information about the loan on the coupon book, including HUD’s toll-free telephone number ((800) 569-4287) to access contact information for homeownership counseling and the website address for either CFPB’s information page on homeownership counselors (http://www.consumerfinance.gov/mortgagehelp/ (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) ) or HUD’s list of homeownership counselors and counseling organizations (http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. We encourage you to read the NCUA's exit link policies. (opens new page).) );
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The individual coupon includes required information, including the payment due date and the amount of any late payment fee;
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Certain information is made available to the member upon request via telephone, in writing, in person, or if the member has consented, electronically, and includes an explanation of the amount due, a breakdown of past payments, and a list of transaction activity that occurred since the last statement; and
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Certain delinquency information is provided to members who are 45 days or more delinquent (including an account history showing the previous six months or the period since the last time the account was current – whichever is shorter – and a reference to the homeownership counselor information you include in your coupon book).
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Transferred to another servicer;
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Fully paid or paid off through a refinance or sale of the dwelling; or
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Discharged in a foreclosure sale.22
For the purposes of this rule, an ARM is a closed-end consumer credit transaction in which the annual percentage rate may increase after consummation. You must make disclosures in connection with the initial reset of an ARM and each time an interest rate adjustment results in a payment change. Specifically, the rule:
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Creates a new initial interest rate adjustment disclosure notice;
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Modifies the timing and content of the existing interest rate adjustment notice sent to disclose rate adjustments that cause payment changes; and
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Eliminates the current annual notice. (The ongoing interest rate adjustment disclosure notice was previously required both when a rate adjustment caused a payment change and annually – even if there was no payment change.)
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The initial interest rate adjustment notice is required only for the first time the interest rate adjusts. It must be provided to a member between 210 days and 240 days before the first payment at the new rate is due. This notice may contain an estimate of the new rate and new payment.24
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The ongoing interest rate adjustment notice must be provided to a member between 60 and 120 days before each time an interest rate adjustment results in a payment change.25
The content and format specified in the rule for notices are demonstrated in the model and sample forms. As such, the proper use of the model and sample forms will comply with both the content and format requirements of this rule. The model forms may be filled out and used, while the sample forms demonstrate an example of the proper way to fill out the forms. A brief summary of the rule’s content, formatting, timing and delivery requirements for both types of disclosures follows
Requirements |
Required for Initial ARM Notice -§1026.20(d) |
Required for Ongoing ARM Notice - §1026.20(c) |
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Required when: |
The first time the interest rate adjusts |
Every time an interest rate adjustment results in a corresponding change in payment. There is no requirement to send the annual notice if there is no payment change during year. |
Timing: |
210 to 240 days before the first payment at the new rate is due |
60 to 120 days before the first payment at the new rate is due |
Estimate: |
Estimates may be used |
Exact information must be used |
Formatting: |
See 12 CFR §1026.20(d)(3) |
See 12 CFR §1026.20(c)(3) |
Sample form: |
12 CFR Part 1026, Appendix H-4(D)(4) |
12 CFR Part 1026, Appendix H-4(D)(2) |
Model form: |
12 CFR Part 1026, Appendix H-4(D)(3) |
12 CFR Part 1026, Appendix H-4(D)(1) |
Delivery: |
Must be in a separate document from all other written materials, but can be provided in same envelope as other notices |
Must be segregated from other information and can be provided in same envelope as other notices |
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The prompt crediting provision applies to open-end and closed-end mortgages secured by a principal dwelling.
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The payoff statement provision applies to open-end and closed-end mortgages secured by a dwelling.
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Credit the partial payment upon receipt;
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Return the partial payment to the borrower; or
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Hold the payment in a suspense or unapplied funds account.
Sincerely,
/ s /
Debbie Matz
Chairman
Footnotes
1 78 FR 10901 (Feb. 14, 2013) as amended by 78 FR 44685 (Jul. 24, 2013), 78 FR 60381 (Oct.1, 2013), and 78 FR 62993 (Oct. 23, 2013) (Interim Final Rule)
2 Housing finance agencies are also exempted from the rule. 12 CFR § 1026.41(e)(4)(ii).
378 FR 10695 (Feb. 14, 2013), as amended by 78 FR 44685 (July 24, 2013), 78 FR 60381 (Oct.1 2013), and 78 FR 62993 (Oct. 23, 2013) (Interim Final Rule).
4 http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf (opens new window)
(You will be leaving NCUA.gov and accessing a non-NCUA website.
We encourage you to read the NCUA's
exit link policies. (opens new page).)
.
5 Any mortgages you or your affiliates obtain as part of a merger or acquisition, or as part of the acquisition of all of the assets or liabilities of a branch office of a creditor, count as loans for which you (or an affiliate) are the creditor or assignee.
612 CFR § 1026.32(b)(5). Also, an affiliate of a federal credit union is a credit union service organization (CUSO) that is wholly or majority owned by the federal credit union. An affiliate of a state-chartered credit union is a company that is controlled by the credit union. See 12 CFR § 1016.3.
7 12 CFR § 1026.41(e)(4)(ii), Comment 41(e)(4)(ii)-2.ii).
8 12 CFR § 1026.41(a)(2).
9 Open-end transactions have a separate periodic statement requirement not covered in the TILA Mortgage Servicing rule, 12 CFR § 1026.7.
10 12 CFR § 1026.41(a)(2).
11 12 CFR § 1026.41(b), Comment 41(b)-1 and Comment 7(b)(11)-1.
12 CFPB Bulletin 2013-12 (October 15, 2013) located at http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf (opens new window)
(You will be leaving NCUA.gov and accessing a non-NCUA website.
We encourage you to read the NCUA's
exit link policies. (opens new page).)
.
13 12 CFR § 1026.41(a), Comment 41(a)-4.
14 12 CFR § 1026.41(c). You do not need to follow the full ESIGN verification procedures before providing a statement electronically. Comment 41(c)-4.
15 78 FR 10902, 10962 (Feb. 14, 2013).
1612 CFR § 1026.41(c), Comment 41(c)-3
17 12 CFR § 1026.41(c), Comment 41(c)-4
18 12 CFR § 1026.41(d); 2013 Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) Mortgage Servicing Final Rules Small Entity Compliance Guide, sec. 4.VI (November 27, 2013).
19 12 CFR part 1026, Appendix H-30; 2013 Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) Mortgage Servicing Final Rules Small Entity Compliance Guide, sec. 4.VI (November 27, 2013).
20 12 CFR § 1026.41(c), Comment 41(c)-4.
2112 CFR § 1026.41(e)(3); 2013 Real Estate Settlement Procedures Act (Regulation X) and Truth In Lending Act (Regulation Z) Mortgage Servicing Final Rules Small Entity Compliance Guide, sec. 4.VIII (November 27, 2013).
22 12 CFR § 1026.41(e), Comment 41(e)(5)-2.
23 12 CFR § 1026.20(c), (d).
24 12 CFR § 1026.20(c)(1)(ii)(B).
25 12 CFR § 1026.20(d).
26 12 CFR § 1026.20(c).
27 CFPB Bulletin 2013-12 (October 15, 2013) located at http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf (opens new window)
(You will be leaving NCUA.gov and accessing a non-NCUA website.
We encourage you to read the NCUA's
exit link policies. (opens new page).)
.
28 12 CFR § 1026.20(c), (d). If the creditor or assignee no longer owns the loan, it is not required to send the ARM notices.
29 12 CFR §§ 1026.17(a); 1026.20(d).
30 12 CFR § 1026.20(c)(2), (d)(2).
31 12 CFR § 1026.36(c), Comment 36(c)(1)(iii)-2 .
32 See Section 913 of the Electronic Fund Transfer Act, 15 U.S.C. 1693k.
33 The original final rule was published in the Federal Register on February 1, 2013. Adjustments and clarifications to the rule were published on July 24, 2013, October 1, 2013, and October 23, 2013.