Bulletin 2020-02-Compliance Bulletin and Policy Guidance: Handling of Information and Documents During Mortgage Servicing Transfers, 25281-25285 [2020-09151]

Download as PDF 25281 Rules and Regulations Federal Register Vol. 85, No. 85 Friday, May 1, 2020 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. (A) Transfer-related policies and procedures, and (B) loan information and documents for ensuring accuracy. The Code of Federal Regulations is sold by the Superintendent of Documents. A. Background BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1024 Bulletin 2020–02—Compliance Bulletin and Policy Guidance: Handling of Information and Documents During Mortgage Servicing Transfers Bureau of Consumer Financial Protection. ACTION: Compliance bulletin and policy guidance. AGENCY: The Bureau of Consumer Financial Protection (Bureau) is issuing a compliance bulletin and policy guidance (Bulletin) entitled, ‘‘Compliance Bulletin and Policy Guidance: Handling of Information and Documents During Mortgage Servicing Transfers.’’ The purpose of the policy statement is to provide guidance to residential mortgage servicers regarding the transfer of mortgage loans, including examples of practices that the Bureau may consider as contributing to policies and procedures that are reasonably designed to achieve the objectives of the regulatory requirements. DATES: This Bulletin is applicable on May 1, 2020. FOR FURTHER INFORMATION CONTACT: Eric Lum, Analyst, Office of Supervision Policy, at 202–435–9783 or Allison I. Brown, Deputy Assistant Director, Office of Supervision Policy, at 202– 435–7107. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@ cfpb.gov. SUPPLEMENTARY INFORMATION: SUMMARY: I. Introduction The Bureau of Consumer Financial Protection (Bureau) is issuing this Bulletin to residential mortgage servicers and subservicers (collectively, servicers), in light of potential risks to consumers that may arise in connection with transfers of residential mortgage servicing rights. This bulletin covers: VerDate Sep<11>2014 08:05 May 01, 2020 Jkt 250001 II. Compliance Bulletin and Policy Guidance A mortgage servicer, among other things, collects and processes loan payments on behalf of the owner of the mortgage note, conducts escrow related processes and handles loss mitigation as appropriate. Servicing transfers are common and may occur in several ways. The mortgage owner may sell the rights to service the loan, called the Mortgage Servicing Rights (MSR), separately from the note ownership. The owner of the loan or MSR may, rather than servicing the loan itself, hire a vendor–typically called a subservicer–to take on the servicing duties or aspects of such servicing. MSR owners frequently sell MSR outright as an asset. Servicing transfers may also occur through whole loan servicing transfers or whole loan portfolio transfers, rather than through sales of MSR. In this document, we use the term ‘‘transfer’’ broadly to cover transfers of servicing rights as well as transfers of servicing responsibilities, in total or in part, through subservicing or whole loan servicing arrangements. The term ‘‘transferor’’ servicer means a servicer who transfers or will transfer the right to perform servicing functions pursuant to an agreement or understanding. The term ‘‘transferee’’ servicer means a servicer who obtains or who will obtain the right to perform servicing functions pursuant to an agreement or understanding. As consumers do not have a choice with respect to the transfer of servicing, seamless and accurate transfers are important to prevent consumer harm. In 2014, the Bureau issued CFPB Bulletin 2014–01.1 The Bulletin discussed the servicing transfer requirements in the Regulation X mortgage servicing rules.2 The Bulletin also addressed frequently asked questions, the focus areas for Bureau examinations, and the other 1 Bulletin 2014–01 was published in the Federal Register as Compliance Bulletin and Policy Guidance—Mortgage Servicing Transfers, 79 FR 63295 (Oct. 29, 2014). Bulletin 2014–01 replaced the earlier Bulletin 2013–01 (Mortgage Servicing Transfers), released in February 2013, which addressed servicing transfers before the effective date of 12 CFR 1024.38(a), (b)(4). 2 12 CFR 1024.38(a), (b)(4). PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Federal consumer financial laws applicable to servicing transfers. In supervisory examinations conducted since 2014, the Bureau has continued to find weaknesses in compliance management systems and violations of Regulation X related to mortgage servicing transfers.3 Specifically, the Bureau has seen inadequacies in servicers’ policies and procedures for transferring all the loan information and documents to the new servicer in a timely and accurate manner. It is also important that servicing functions continue on an uninterrupted basis during servicing transfers–such as the payment of taxes and insurance from escrow accounts or continuing to exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application. Recent economic conditions and structural changes to the mortgage servicing market, including the growth of nonbank servicers that are not subject to the same capital standards as banks, contribute to these risks.4 Taking into consideration the coronavirus pandemic that led to the President’s declaration of a national emergency on March 13, 2020 (National Emergency), and the economic and social dislocations caused by the pandemic, for the duration of the National Emergency and for 120 days thereafter, if a servicing transfer is requested or required by a Federal regulator or by the security issuer of ‘‘Government Loans’’ (as defined in the CARES Act), the Bureau intends, for activity during this period, to consider the challenges that entities may face as a result, including operational and time constraints related to the transfer, and to be sensitive to good-faith efforts demonstrably designed to transfer the servicing without adverse impact to consumers. The Bureau intends to focus supervisory feedback for institutions, if needed, on identifying issues, correcting deficiencies, and ensuring appropriate remediation to consumers. 3 In addition to the requirements discussed in this bulletin, State laws and regulations may impose additional requirements applicable to servicers. 4 See Kim, You Suk, Steven M. Laufer, Karen Pence, Richard Stanton, and Nancy Wallace. 2018. ‘‘Liquidity Crises in the Mortgage Market.’’ BPEA Conference Draft, Spring, and Goodman, Laurie, and Karan Kaul. 2016. ‘‘Nonbank Servicer Regulation: New Capital and Liquidity Requirements Don’t Offer Enough Loss Protection’’ Urban Institute Brief. E:\FR\FM\01MYR1.SGM 01MYR1 25282 Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Rules and Regulations B. General Transfer-Related Policies and Procedures In its supervisory examinations, the Bureau reviews mortgage servicers for compliance with Regulation X servicing transfer requirements, which among other things, require servicers to maintain certain policies and procedures related to facilitating the transfer of information during mortgage servicing transfers.5 Specifically, Regulation X requires transferor servicers to maintain policies and procedures that are reasonably designed to achieve the objective of the timely transfer of all information and documents in the possession or control of the servicer relating to a transferred mortgage loan to a transferee servicer in a form and manner that ensures the accuracy of the information and documents transferred and that enables a transferee servicer to comply with the terms of the transferee servicer’s obligations to the owner or assignee of the mortgage loan and applicable law.6 Regulation X also requires transferee servicers to maintain policies and procedures that are reasonably designed to ensure that the servicer can identify necessary documents or information that may not have been transferred by a transferor servicer and obtain such documents from the transferor servicer.7 The following are examples of servicer practices that the Bureau may consider as contributing to policies and procedures that are reasonably designed to achieve the objectives of these transfer requirements: 5 ‘‘Small servicers’’ as defined in Regulation Z, 12 CFR 1026.41(e)(4), do not have to comply with the policies and procedures requirements described in this Bulletin. Regulation X, 12 CFR 1024.30(b)(1). 6 12 CFR 1024.38(b)(4)(i). 12 CFR 1024.38(b)(4) does not prescribe any specific policies or procedures that a servicer must implement; the rule says that the policies and procedures must be ‘‘reasonably designed’’ to achieve the goal of facilitating the transfer of information during servicing transfers. The Bureau will consider a servicer’s transfer-related policies and procedures as a whole, in light of the servicer’s particular facts and circumstances, in determining whether they are reasonably designed to achieve the rule’s objectives. Title 12 CFR part 1024, Supplement I, Comment 38(a)–1 also states that a servicer may determine the specific policies and procedures it will adopt and the methods by which it will implement those policies and procedures so long as they are reasonably designed to achieve the objectives set forth in § 1024.38(b). And a servicer has flexibility to determine such policies and procedures and methods in light of the size, nature, and scope of the servicer’s operations, including, for example, the volume and aggregate unpaid principal balance of mortgage loans serviced, the credit quality, including the default risk, of the mortgage loans serviced, and the servicer’s history of consumer complaints. 7 12 CFR 1024.38(b)(4)(ii). VerDate Sep<11>2014 08:05 May 01, 2020 Jkt 250001 Planning and Pre-Transfer Testing • For each transfer of mortgage servicing that occurs, developing a servicing transfer plan that includes a communications plan, testing plan (for system conversion), a timeline with key milestones and an escalation plan for potential problems. • Conducting meetings to discuss and clarify issues with counterparties in a timely manner; for large transfers, this could occur months in advance of the transfer for the purposes of developing transfer plans and the obligations of all involved parties, including service providers and investors. • Recognizing if the transfer cannot be implemented successfully in a single batch of all accounts and implementing alternative protocols, such as splitting the transfer into several smaller bundles of accounts to be transferred in subsequent months to ensure that the transferee can comply with its servicing obligations for every loan transferred. • Determining servicing responsibilities for legacy accounts including tax reporting, credit bureau reporting and other questions that may arise. • Using tailored testing protocols to evaluate the compatibility of the transferred data with the transferee servicer’s systems and data mapping protocols. • Proactively identifying material issues that potentially impact the accuracy or completeness of the loan data or documentation to be transferred as well as each servicer’s ability to comply with the law or investor guidelines with respect to the transferred loans. • Identifying any loans in default, active foreclosure and bankruptcy. Where applicable, include documentation regarding loss mitigation activity for each loan, including status and notes pertaining to the loss mitigation action, copies of agreements entered into with a borrower on a loss mitigation option, and any analysis by a servicer with respect to potential recovery from a non-performing mortgage loan. • Engaging in quality control work after a transfer of preliminary data to validate that the data on the transferee’s system matches the data submitted by the transferor. Prioritizing data mapping errors that occurred during de-boarding or on-boarding process for resolution. Post-Transfer Monitoring • Conducting a post-transfer review or de-brief to determine effectiveness of the transfer plan and whether any gaps have arisen that require resolution. PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 • Monitoring consumer complaints and loss mitigation performance metrics including borrower engagement rate, approvals of trial modifications, repayment plans, non-home retention options, and completed workouts for at least four to six months post-transfer. Also monitoring for delinquencies, foreclosures and bankruptcies to detect trends, including for month-to-month increases after transfer. As the composition and complexity of servicer portfolios vary, servicers may not need to implement all the example policies and procedures listed above in order to meet the objectives outlined in Regulation X. However, the Bureau emphasizes the importance of posttransfer monitoring to ensure that transferred data is complete, accurate and functional for the transferee. For example, the Bureau found at least one servicer that did not engage in adequate post-transfer validation with its transferee, which contributed to its failure to identify that it had not transmitted all the loss mitigation documents in its possession. Only after a borrower complained to the transferee did either servicer become aware that the transferor failed to send an executed loan modification agreement to the transferee.8 Generally, transferees must have policies and procedures reasonably designed to ensure, in connection with a servicing transfer, that the transferee receives copies of any loss mitigation applications and agreements, finds out about the status of any prior discussions with borrowers, and retrieves missing loss mitigation documents and information from the transferor servicer before asking the borrower for such information.9 These obligations apply to any accounts for which the servicer’s determination of the borrower’s eligibility for loss mitigation is in process, including any short-term payment forbearance program or a shortterm repayment plan that the servicer may offer based on an evaluation of an incomplete loss mitigation application.10 The Bureau also emphasizes the importance of maintaining the transferred data after receipt. Under Regulation X, servicers must maintain certain documents and data on each 8 The Bureau published supervisory findings related to mortgage servicing transfers in the June 2016 edition of Supervisory Highlights, available here: https://files.consumerfinance.gov/f/ documents/Mortgage_Servicing_Supervisory_ Highlights_11_Final_web_.pdf. 9 Comment 38(b)(4)(ii)–1. 10 See 12 CFR 1024.41(c)(2)(iii) (describing requirements for servicers offering certain shortterm loss mitigation options based on an evaluation of an incomplete loss mitigation application); see also comments 41(b)(1)–4.iii and 41(c)(2)(iii). E:\FR\FM\01MYR1.SGM 01MYR1 Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Rules and Regulations mortgage loan account serviced by the servicer in a manner that facilitates compiling such documents and data into a servicing file within five days.11 A servicing file includes, among other things, a schedule of all transactions credited or debited to the mortgage loan account (including to any escrow or suspense account), a copy of the security instrument, copies of any loan modifications, any notes created by servicer personnel reflecting communications with the borrower about the mortgage loan account, and to the extent applicable, a report of the data fields relating to the borrower’s mortgage loan account.12 Transferors must also retain records that document actions taken with respect to a borrower’s mortgage loan account until one year after the date a mortgage loan is discharged or servicing of a mortgage loan is transferred by the servicer to a transferee servicer.13 The Bureau encourages servicers to adopt strong policies and procedures for maintaining documents and information received in a transfer as part of an overall compliance program. C. Loan Information and Documents To Be Transferred or Received Regulation X requires transferor servicers to maintain policies and procedures that are reasonably designed to achieve the objectives of timely transferring all information and documents in the possession or control of the servicer relating to a transferred mortgage loan to a transferee servicer in a form and manner that: • Ensures the accuracy of the information and documents transferred, and • Enables a transferee servicer to comply with the terms of the transferee servicer’s obligations to the owner or assignee of the mortgage loan and applicable law.14 Use of a uniform data standard like the Mortgage Industry Standards Maintenance Organization (MISMO) standard would increase data compatibility and strengthen compliance across the servicing industry by fostering more consistency in the data fields used by servicers. The Bureau encourages servicers to adopt a common data standard and data dictionary to facilitate these goals. Other practices that could contribute to compliance include having contracts that require transferors to provide all the necessary information and documents at 11 12 CFR 1024.38(c)(2). CFR 1024.38(c)(2)(i) through (v). 13 12 CFR 1024.38(c)(1). 14 12 CFR 1024.38(b)(4)(i). 12 12 VerDate Sep<11>2014 08:05 May 01, 2020 Jkt 250001 loan boarding to a transferee servicer’s systems. Necessary information and documents could include foundational information for servicing the loan, but not limited to, a unique identifier for each loan, the terms of the loan (including the rate and term), current unpaid principal balance (UPB) as of a specific date, information concerning any escrow accounts (including balances, distribution history, and future obligations), payment histories, the terms of any loss mitigation that was offered to a borrower under which the borrower is performing, and any other modifications or other information needed to adequately service the loan. Certain information and documents present heightened compliance risk. For example, failure to transfer private mortgage insurance cancellation and mid-point dates may contribute to violations of the Homeowners Protection Act.15 Likewise, loss mitigation-related documents, including incomplete applications and executed modification agreements are critical for compliance. Regulation X requires transferor servicers to maintain policies and procedures with respect to the transfer of any information reflecting the current status of discussions with a borrower regarding loss mitigation options, any agreements entered into with a borrower on a loss mitigation option, and any analysis done with respect to potential recovery from a nonperforming mortgage loan, as appropriate.16 Because borrowers may continue to provide loss mitigationrelated documents and information to the transferor servicer after their loans have transferred, transferors must work with transferees to ensure that the new information and documents are transferred and that borrowers are not adversely affected.17 A borrower that submits a facially complete or complete application to the transferor servicer after the transfer date has the same rights and protections that would have applied if the borrower had submitted the complete application to the transferee servicer.18 An application that was facially complete under § 1024.41(c)(2)(iv) with respect to the transferor servicer remains facially complete under the transferee servicer 15 See CFPB Bulletin 2015–03. ‘‘Compliance Bulletin: Private Mortgage Insurance Cancellation and Termination’’. 16 Comment 38(b)(4)(i)–2. 17 See Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), 81 FR 72160, 72273–76 (Oct. 19, 2016); comments 38(b)(4)(i)–2 and 41(k)(1)(i)–1.iii. 18 See 12 CFR 1024.41(k)(1)(i); Comment 41(k)(1)(i)–2. PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 25283 as of the date it was facially complete with respect to the transferor servicer. And if an application was complete with respect to the transferor servicer, but is not complete with respect to the transferee servicer, the transferee servicer must treat the application as facially complete as of the date the application was complete with respect to the transferor servicer.19 Appendix A provides examples of information and documents grouped by subject area which the Bureau intends to use to assess compliance with Regulation X. The appendix is provided as a guide and focuses on common data elements essential to the servicing of mortgage loans. Servicers may use the appendix to assess the baseline appropriateness of their transfer-related policies and procedures. Some listed documents and information may be not applicable to certain loans. Other loans may require documents and information not listed in Appendix A. The overall composition and complexity of a servicer’s portfolio is important in determining whether its policies and procedures meet the objectives outlined in Regulation X. For example, servicers with very few adjustable rate mortgages might have relatively simple policies and procedures for ensuring documents and information related to interest rate adjustments are timely transferred and accounted for. And servicers with large default portfolios might have robust policies and procedures for ensuring that loss mitigation documents and information pertaining to defaulted accounts are timely transferred. Regulatory Requirements This Bulletin is a non-binding general statement of policy articulating considerations relevant to the Bureau’s exercise of its supervisory authority under Regulation X and RESPA and reciting certain requirements of Regulation X and other Federal consumer financial laws applicable to servicing transfers. It is therefore exempt from the notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b).20 Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a). The Bureau has determined that this Bulletin does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on 19 Comment 41(k)(1)(i)–2. this is not a ‘‘statement of policy’’ as that term is specifically used in Regulation X, 12 CFR 1024.4(a)(1)(ii). 20 However, E:\FR\FM\01MYR1.SGM 01MYR1 25284 Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Rules and Regulations covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Pursuant to the Congressional Review Act, 5 U.S.C. 801 et seq., the Bureau will submit a report containing this Bulletin and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the United States prior to its applicability date. The Office of Information and Regulatory Affairs has designated this Bulletin as not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). Appendix A—Examples of Information and Data To Be Transferred or Received 21 • Fees owed and whether reimbursable/ collectible from borrower or investor Æ Late fees Æ Broker price opinion fees owed Æ Property inspection fees owed Æ Attorney fees owed Æ Publication fees owed Æ Fees owed for copies of documents Æ Corporate advances owed Æ Prior bankruptcy D Discharge date D Dismissal date II. Investor Information • • • • • I. Foundational Loan Information • Name and version of servicing systems of record for each product type serviced • Loan number and MIN • Principal balance Æ Original principal balance Æ Modified principal balance • Periodic payment due Æ Amount of interest due Æ Amount of principal due Æ Next payment due date Æ Amount of any overdue payment • Amount of any principal prepayments • Amount of funds in suspense account • Balloon payment data • Origination date • Property address • Borrower mailing address • Name of originator, NMLS ID if available • Original loan to value • Purchase loan/refinance • Loan term • Maturity date • Successor-in-interest Æ If yes Æ Address and identity Æ Confirmed? • Occupancy code (i.e. primary residence, second home, investment property) • Interest rate • Interest calculation method (i.e. 30/ 360, DSI) • ARM loan Æ Index Æ Margin Æ Next change date • Loan Type Æ FHA Æ VA Æ USDA Æ Conventional Æ State bond program 21 This is not an exhaustive list of documents and information that may be necessary for the transfer. VerDate Sep<11>2014 08:05 May 01, 2020 Jkt 250001 Name Contact Information Disbursement Information Reporting Requirements Remittance type (Scheduled/ scheduled, scheduled/actual, actual/actual) III. Escrow Accounts • Amount of escrow payment due with periodic payment • Date of last escrow analysis • Tax agency code for each applicable agency • Date of last tax payment to local agency • Estimated total tax payments for next cycle • Next tax due date(s) • Parcel number (if multiple parcels include all) • Date of last insurance payment • Identity of insurer • Confirmation of proof of adequate insurance received • Historic escrow records (to address borrower questions and disputes) • Tax service contracts that will stay in effect • For any items paid from the escrow account other than taxes or insurance, Æ Identity of the payee Æ Due date(s) of payment Æ Date of last payment and date of next payment Æ Estimated payments for the next cycle, and other information necessary to maintain payment of such item pursuant to the escrow account agreement. IV. Private Mortgage Insurance • • • • • • Amount last paid Name and address of insurer Amount due Date due Original value of the property The date based on amortization schedule(s) when a borrower may request cancellation • Date on which monthly premiums are no longer required for 78% loan to original value PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 • Date on which monthly premiums are no longer required based on loan midpoint V. FHA Insurance • • • • • • • • • MIP amount MIP last paid MIP due MIP due date Loan origination date Loan term Partial claim amount, if any FHA case number assignment date MIP cancellation date based on original amortization VI. Hazard Insurance/Flood Insurance • Policy numbers • Name and address of insurer (voluntary and lender placed) • Expiration/renewal date(s) • Premium amount(s) • Frequency of payment • Coverage levels • Original value of property • Flood zone determination certificate • Prior completed insurance claims • Open insurance claims Æ Claim amount Æ Loss draft funds held Æ Inspection dates and completion estimates VII. Loss Mitigation (Including ShortTerm Options) • Current status of discussions with a borrower on a loss mitigation option • Any agreements made with a borrower on a loss mitigation option • Any analysis by a servicer with respect to potential recovery from a non-performing mortgage loan • Copies of complete and incomplete loss mitigation application(s) and information and documents submitted in conjunction with the application, including acknowledgment notices and denial notices Æ Date of forbearance, modification or other loss mitigation option Æ New loan amount Æ New payment amount (show Principal and Interest as well as taxes and insurance, if applicable.) Æ Term Æ Due date of plan Æ Denial date Æ Denial reason Æ New gross modification amount Æ Modified appraisal value VIII. Foreclosure • Status of foreclosure • Date referred to attorney • Attorney name and contact information E:\FR\FM\01MYR1.SGM 01MYR1 Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Rules and Regulations • • • • • • Publication date Anticipated or scheduled sale date All time line step and events Borrower contact information All phones numbers on file Email addresses for all borrowers IX. Bankruptcy • Notice of bankruptcy/court and case number • Bankruptcy chapter and filing date • Status of case • Proof of Claim filing date • Next prepetition and post-petition payment due dates • Motion for Relief filing date • Plan conversion date, if applicable • Attorney acknowledgement of bankruptcy • Other bankruptcy documents X. Signing Authority The Director of the Bureau, having reviewed and approved this document is delegating the authority to electronically sign this document to Laura Galban, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register. Dated: April 24, 2020. Laura Galban, Federal Register Liaison, Bureau of Consumer Financial Protection. [FR Doc. 2020–09151 Filed 4–30–20; 8:45 am] BILLING CODE 4810–AM–P Authority for This Rulemaking DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA–2020–0006; Airspace Docket No. 17–ASW–26] RIN 2120–AA66 Amendment of VOR Federal Airways V–17, V–18, V–62, V–94, V–163, and V– 568 in the Vicinity of Glen Rose, TX Federal Aviation Administration (FAA), DOT. ACTION: Final rule. AGENCY: This action amends VHF Omnidirectional Range (VOR) Federal airways V–17, V–18, V–62, V–94, V– 163, and V–568 in the vicinity of Glen Rose, TX. The modifications are necessary due to the planned decommissioning of the VOR portion of the Glen Rose, TX, VOR/Tactical Air Navigation (VORTAC) navigation aid (NAVAID), which provides navigation guidance for portions of the affected airways. The Glen Rose VOR is being decommissioned as part of the FAA’s VOR Minimum Operational Network (MON) program. SUMMARY: VerDate Sep<11>2014 08:05 May 01, 2020 Effective date 0901 UTC, July 16, 2020. The Director of the Federal Register approves this incorporation by reference action under Title 1 Code of Federal Regulations part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments. ADDRESSES: FAA Order 7400.11D, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at https:// www.faa.gov/air_traffic/publications/. For further information, you can contact the Rules and Regulations Group, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267–8783. The Order is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of FAA Order 7400.11D at NARA, email: fedreg.legal@nara.gov or go to https:// www.archives.gov/federal-register/cfr/ ibr-locations.html. FOR FURTHER INFORMATION CONTACT: Colby Abbott, Rules and Regulations Group, Office of Policy, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267–8783. SUPPLEMENTARY INFORMATION: DATES: Jkt 250001 The FAA’s authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency’s authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify the route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System. History The FAA published a notice of proposed rulemaking (NPRM) for Docket No. FAA–2020–0006 in the Federal Register (85 FR 3288; January 21, 2020), amending VOR Federal airways V–17, V–18, V–62, V–94, V– 163, and V–568 in the vicinity of Glen Rose, TX, due to the planned decommissioning of the VOR portion of the Glen Rose, TX, VORTAC. Interested PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 25285 parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received. Subsequent to the NPRM, the FAA published a rule for Docket No. FAA– 2018–1028 in the Federal Register (85 FR 13731; March 10, 2020), amending VOR Federal airway V–18 by removing the airway segment between the Vulcan, AL, VORTAC and the Colliers, SC, VORTAC. That airway amendment was effective May 21, 2020, and is included in this rule. VOR Federal airways are published in paragraph 6010(a) of FAA Order 7400.11D dated August 8, 2019, and effective September 15, 2019, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document will be subsequently published in the Order. FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15. Availability and Summary of Documents for Incorporation by Reference This document amends FAA Order 7400.11D, Airspace Designations and Reporting Points, dated August 8, 2019, and effective September 15, 2019. FAA Order 7400.11D is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11D lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points. The Rule The FAA is amending Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying VOR Federal airways V– 17, V–18, V–62, V–94, V–163, and V– 568. The planned decommissioning of the VOR portion of the Glen Rose, TX, VORTAC NAVAID has made this action necessary. The VOR Federal airway changes are outlined below. V–17: V–17 extends between the Brownsville, TX, VORTAC and the Goodland, KS, VORTAC. The airway segment overlying the Glen Rose, TX, VORTAC between the Waco, TX, VORTAC and the Millsap, TX, VORTAC is removed. The unaffected portions of the existing airway remain as charted. V–18: V–18 extends between the Millsap, TX, VORTAC and the Vulcan, AL, VORTAC; and between the Colliers, SC, VORTAC and the Charleston, SC, VORTAC. The airway segment overlying the Glen Rose, TX, VORTAC between the Millsap, TX, VORTAC and the Cedar Creek, TX, VORTAC is removed. The unaffected portions of the existing airway remain as charted. E:\FR\FM\01MYR1.SGM 01MYR1

Agencies

BUREAU OF CONSUMER FINANCIAL PROTECTION

[Federal Register Volume 85, Number 85 (Friday, May 1, 2020)]
[Rules and Regulations]
[Pages 25281-25285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09151]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 85, No. 85 / Friday, May 1, 2020 / Rules and 
Regulations

[[Page 25281]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1024


Bulletin 2020-02--Compliance Bulletin and Policy Guidance: 
Handling of Information and Documents During Mortgage Servicing 
Transfers

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Compliance bulletin and policy guidance.

-----------------------------------------------------------------------

SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing a compliance bulletin and policy guidance (Bulletin) entitled, 
``Compliance Bulletin and Policy Guidance: Handling of Information and 
Documents During Mortgage Servicing Transfers.'' The purpose of the 
policy statement is to provide guidance to residential mortgage 
servicers regarding the transfer of mortgage loans, including examples 
of practices that the Bureau may consider as contributing to policies 
and procedures that are reasonably designed to achieve the objectives 
of the regulatory requirements.

DATES: This Bulletin is applicable on May 1, 2020.

FOR FURTHER INFORMATION CONTACT: Eric Lum, Analyst, Office of 
Supervision Policy, at 202-435-9783 or Allison I. Brown, Deputy 
Assistant Director, Office of Supervision Policy, at 202-435-7107. If 
you require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION: 

I. Introduction

    The Bureau of Consumer Financial Protection (Bureau) is issuing 
this Bulletin to residential mortgage servicers and subservicers 
(collectively, servicers), in light of potential risks to consumers 
that may arise in connection with transfers of residential mortgage 
servicing rights. This bulletin covers: (A) Transfer-related policies 
and procedures, and (B) loan information and documents for ensuring 
accuracy.

II. Compliance Bulletin and Policy Guidance

A. Background

    A mortgage servicer, among other things, collects and processes 
loan payments on behalf of the owner of the mortgage note, conducts 
escrow related processes and handles loss mitigation as appropriate. 
Servicing transfers are common and may occur in several ways. The 
mortgage owner may sell the rights to service the loan, called the 
Mortgage Servicing Rights (MSR), separately from the note ownership. 
The owner of the loan or MSR may, rather than servicing the loan 
itself, hire a vendor-typically called a subservicer-to take on the 
servicing duties or aspects of such servicing. MSR owners frequently 
sell MSR outright as an asset. Servicing transfers may also occur 
through whole loan servicing transfers or whole loan portfolio 
transfers, rather than through sales of MSR. In this document, we use 
the term ``transfer'' broadly to cover transfers of servicing rights as 
well as transfers of servicing responsibilities, in total or in part, 
through subservicing or whole loan servicing arrangements. The term 
``transferor'' servicer means a servicer who transfers or will transfer 
the right to perform servicing functions pursuant to an agreement or 
understanding. The term ``transferee'' servicer means a servicer who 
obtains or who will obtain the right to perform servicing functions 
pursuant to an agreement or understanding.
    As consumers do not have a choice with respect to the transfer of 
servicing, seamless and accurate transfers are important to prevent 
consumer harm. In 2014, the Bureau issued CFPB Bulletin 2014-01.\1\ The 
Bulletin discussed the servicing transfer requirements in the 
Regulation X mortgage servicing rules.\2\ The Bulletin also addressed 
frequently asked questions, the focus areas for Bureau examinations, 
and the other Federal consumer financial laws applicable to servicing 
transfers.
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    \1\ Bulletin 2014-01 was published in the Federal Register as 
Compliance Bulletin and Policy Guidance--Mortgage Servicing 
Transfers, 79 FR 63295 (Oct. 29, 2014). Bulletin 2014-01 replaced 
the earlier Bulletin 2013-01 (Mortgage Servicing Transfers), 
released in February 2013, which addressed servicing transfers 
before the effective date of 12 CFR 1024.38(a), (b)(4).
    \2\ 12 CFR 1024.38(a), (b)(4).
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    In supervisory examinations conducted since 2014, the Bureau has 
continued to find weaknesses in compliance management systems and 
violations of Regulation X related to mortgage servicing transfers.\3\ 
Specifically, the Bureau has seen inadequacies in servicers' policies 
and procedures for transferring all the loan information and documents 
to the new servicer in a timely and accurate manner. It is also 
important that servicing functions continue on an uninterrupted basis 
during servicing transfers-such as the payment of taxes and insurance 
from escrow accounts or continuing to exercise reasonable diligence in 
obtaining documents and information to complete a loss mitigation 
application. Recent economic conditions and structural changes to the 
mortgage servicing market, including the growth of nonbank servicers 
that are not subject to the same capital standards as banks, contribute 
to these risks.\4\
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    \3\ In addition to the requirements discussed in this bulletin, 
State laws and regulations may impose additional requirements 
applicable to servicers.
    \4\ See Kim, You Suk, Steven M. Laufer, Karen Pence, Richard 
Stanton, and Nancy Wallace. 2018. ``Liquidity Crises in the Mortgage 
Market.'' BPEA Conference Draft, Spring, and Goodman, Laurie, and 
Karan Kaul. 2016. ``Nonbank Servicer Regulation: New Capital and 
Liquidity Requirements Don't Offer Enough Loss Protection'' Urban 
Institute Brief.
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    Taking into consideration the coronavirus pandemic that led to the 
President's declaration of a national emergency on March 13, 2020 
(National Emergency), and the economic and social dislocations caused 
by the pandemic, for the duration of the National Emergency and for 120 
days thereafter, if a servicing transfer is requested or required by a 
Federal regulator or by the security issuer of ``Government Loans'' (as 
defined in the CARES Act), the Bureau intends, for activity during this 
period, to consider the challenges that entities may face as a result, 
including operational and time constraints related to the transfer, and 
to be sensitive to good-faith efforts demonstrably designed to transfer 
the servicing without adverse impact to consumers. The Bureau intends 
to focus supervisory feedback for institutions, if needed, on 
identifying issues, correcting deficiencies, and ensuring appropriate 
remediation to consumers.

[[Page 25282]]

B. General Transfer-Related Policies and Procedures

    In its supervisory examinations, the Bureau reviews mortgage 
servicers for compliance with Regulation X servicing transfer 
requirements, which among other things, require servicers to maintain 
certain policies and procedures related to facilitating the transfer of 
information during mortgage servicing transfers.\5\ Specifically, 
Regulation X requires transferor servicers to maintain policies and 
procedures that are reasonably designed to achieve the objective of the 
timely transfer of all information and documents in the possession or 
control of the servicer relating to a transferred mortgage loan to a 
transferee servicer in a form and manner that ensures the accuracy of 
the information and documents transferred and that enables a transferee 
servicer to comply with the terms of the transferee servicer's 
obligations to the owner or assignee of the mortgage loan and 
applicable law.\6\
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    \5\ ``Small servicers'' as defined in Regulation Z, 12 CFR 
1026.41(e)(4), do not have to comply with the policies and 
procedures requirements described in this Bulletin. Regulation X, 12 
CFR 1024.30(b)(1).
    \6\ 12 CFR 1024.38(b)(4)(i). 12 CFR 1024.38(b)(4) does not 
prescribe any specific policies or procedures that a servicer must 
implement; the rule says that the policies and procedures must be 
``reasonably designed'' to achieve the goal of facilitating the 
transfer of information during servicing transfers. The Bureau will 
consider a servicer's transfer-related policies and procedures as a 
whole, in light of the servicer's particular facts and 
circumstances, in determining whether they are reasonably designed 
to achieve the rule's objectives. Title 12 CFR part 1024, Supplement 
I, Comment 38(a)-1 also states that a servicer may determine the 
specific policies and procedures it will adopt and the methods by 
which it will implement those policies and procedures so long as 
they are reasonably designed to achieve the objectives set forth in 
Sec.  1024.38(b). And a servicer has flexibility to determine such 
policies and procedures and methods in light of the size, nature, 
and scope of the servicer's operations, including, for example, the 
volume and aggregate unpaid principal balance of mortgage loans 
serviced, the credit quality, including the default risk, of the 
mortgage loans serviced, and the servicer's history of consumer 
complaints.
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    Regulation X also requires transferee servicers to maintain 
policies and procedures that are reasonably designed to ensure that the 
servicer can identify necessary documents or information that may not 
have been transferred by a transferor servicer and obtain such 
documents from the transferor servicer.\7\ The following are examples 
of servicer practices that the Bureau may consider as contributing to 
policies and procedures that are reasonably designed to achieve the 
objectives of these transfer requirements:
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    \7\ 12 CFR 1024.38(b)(4)(ii).
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Planning and Pre-Transfer Testing
     For each transfer of mortgage servicing that occurs, 
developing a servicing transfer plan that includes a communications 
plan, testing plan (for system conversion), a timeline with key 
milestones and an escalation plan for potential problems.
     Conducting meetings to discuss and clarify issues with 
counterparties in a timely manner; for large transfers, this could 
occur months in advance of the transfer for the purposes of developing 
transfer plans and the obligations of all involved parties, including 
service providers and investors.
     Recognizing if the transfer cannot be implemented 
successfully in a single batch of all accounts and implementing 
alternative protocols, such as splitting the transfer into several 
smaller bundles of accounts to be transferred in subsequent months to 
ensure that the transferee can comply with its servicing obligations 
for every loan transferred.
     Determining servicing responsibilities for legacy accounts 
including tax reporting, credit bureau reporting and other questions 
that may arise.
     Using tailored testing protocols to evaluate the 
compatibility of the transferred data with the transferee servicer's 
systems and data mapping protocols.
     Proactively identifying material issues that potentially 
impact the accuracy or completeness of the loan data or documentation 
to be transferred as well as each servicer's ability to comply with the 
law or investor guidelines with respect to the transferred loans.
     Identifying any loans in default, active foreclosure and 
bankruptcy. Where applicable, include documentation regarding loss 
mitigation activity for each loan, including status and notes 
pertaining to the loss mitigation action, copies of agreements entered 
into with a borrower on a loss mitigation option, and any analysis by a 
servicer with respect to potential recovery from a non-performing 
mortgage loan.
     Engaging in quality control work after a transfer of 
preliminary data to validate that the data on the transferee's system 
matches the data submitted by the transferor. Prioritizing data mapping 
errors that occurred during de-boarding or on-boarding process for 
resolution.
Post-Transfer Monitoring
     Conducting a post-transfer review or de-brief to determine 
effectiveness of the transfer plan and whether any gaps have arisen 
that require resolution.
     Monitoring consumer complaints and loss mitigation 
performance metrics including borrower engagement rate, approvals of 
trial modifications, repayment plans, non-home retention options, and 
completed workouts for at least four to six months post-transfer. Also 
monitoring for delinquencies, foreclosures and bankruptcies to detect 
trends, including for month-to-month increases after transfer.
    As the composition and complexity of servicer portfolios vary, 
servicers may not need to implement all the example policies and 
procedures listed above in order to meet the objectives outlined in 
Regulation X. However, the Bureau emphasizes the importance of post-
transfer monitoring to ensure that transferred data is complete, 
accurate and functional for the transferee. For example, the Bureau 
found at least one servicer that did not engage in adequate post-
transfer validation with its transferee, which contributed to its 
failure to identify that it had not transmitted all the loss mitigation 
documents in its possession. Only after a borrower complained to the 
transferee did either servicer become aware that the transferor failed 
to send an executed loan modification agreement to the transferee.\8\ 
Generally, transferees must have policies and procedures reasonably 
designed to ensure, in connection with a servicing transfer, that the 
transferee receives copies of any loss mitigation applications and 
agreements, finds out about the status of any prior discussions with 
borrowers, and retrieves missing loss mitigation documents and 
information from the transferor servicer before asking the borrower for 
such information.\9\ These obligations apply to any accounts for which 
the servicer's determination of the borrower's eligibility for loss 
mitigation is in process, including any short-term payment forbearance 
program or a short-term repayment plan that the servicer may offer 
based on an evaluation of an incomplete loss mitigation 
application.\10\
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    \8\ The Bureau published supervisory findings related to 
mortgage servicing transfers in the June 2016 edition of Supervisory 
Highlights, available here: https://files.consumerfinance.gov/f/documents/Mortgage_Servicing_Supervisory_Highlights_11_Final_web_.pdf.
    \9\ Comment 38(b)(4)(ii)-1.
    \10\ See 12 CFR 1024.41(c)(2)(iii) (describing requirements for 
servicers offering certain short-term loss mitigation options based 
on an evaluation of an incomplete loss mitigation application); see 
also comments 41(b)(1)-4.iii and 41(c)(2)(iii).
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    The Bureau also emphasizes the importance of maintaining the 
transferred data after receipt. Under Regulation X, servicers must 
maintain certain documents and data on each

[[Page 25283]]

mortgage loan account serviced by the servicer in a manner that 
facilitates compiling such documents and data into a servicing file 
within five days.\11\ A servicing file includes, among other things, a 
schedule of all transactions credited or debited to the mortgage loan 
account (including to any escrow or suspense account), a copy of the 
security instrument, copies of any loan modifications, any notes 
created by servicer personnel reflecting communications with the 
borrower about the mortgage loan account, and to the extent applicable, 
a report of the data fields relating to the borrower's mortgage loan 
account.\12\ Transferors must also retain records that document actions 
taken with respect to a borrower's mortgage loan account until one year 
after the date a mortgage loan is discharged or servicing of a mortgage 
loan is transferred by the servicer to a transferee servicer.\13\ The 
Bureau encourages servicers to adopt strong policies and procedures for 
maintaining documents and information received in a transfer as part of 
an overall compliance program.
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    \11\ 12 CFR 1024.38(c)(2).
    \12\ 12 CFR 1024.38(c)(2)(i) through (v).
    \13\ 12 CFR 1024.38(c)(1).
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C. Loan Information and Documents To Be Transferred or Received

    Regulation X requires transferor servicers to maintain policies and 
procedures that are reasonably designed to achieve the objectives of 
timely transferring all information and documents in the possession or 
control of the servicer relating to a transferred mortgage loan to a 
transferee servicer in a form and manner that:
     Ensures the accuracy of the information and documents 
transferred, and
     Enables a transferee servicer to comply with the terms of 
the transferee servicer's obligations to the owner or assignee of the 
mortgage loan and applicable law.\14\
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    \14\ 12 CFR 1024.38(b)(4)(i).
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    Use of a uniform data standard like the Mortgage Industry Standards 
Maintenance Organization (MISMO) standard would increase data 
compatibility and strengthen compliance across the servicing industry 
by fostering more consistency in the data fields used by servicers. The 
Bureau encourages servicers to adopt a common data standard and data 
dictionary to facilitate these goals.
    Other practices that could contribute to compliance include having 
contracts that require transferors to provide all the necessary 
information and documents at loan boarding to a transferee servicer's 
systems. Necessary information and documents could include foundational 
information for servicing the loan, but not limited to, a unique 
identifier for each loan, the terms of the loan (including the rate and 
term), current unpaid principal balance (UPB) as of a specific date, 
information concerning any escrow accounts (including balances, 
distribution history, and future obligations), payment histories, the 
terms of any loss mitigation that was offered to a borrower under which 
the borrower is performing, and any other modifications or other 
information needed to adequately service the loan.
    Certain information and documents present heightened compliance 
risk. For example, failure to transfer private mortgage insurance 
cancellation and mid-point dates may contribute to violations of the 
Homeowners Protection Act.\15\ Likewise, loss mitigation-related 
documents, including incomplete applications and executed modification 
agreements are critical for compliance. Regulation X requires 
transferor servicers to maintain policies and procedures with respect 
to the transfer of any information reflecting the current status of 
discussions with a borrower regarding loss mitigation options, any 
agreements entered into with a borrower on a loss mitigation option, 
and any analysis done with respect to potential recovery from a non-
performing mortgage loan, as appropriate.\16\ Because borrowers may 
continue to provide loss mitigation-related documents and information 
to the transferor servicer after their loans have transferred, 
transferors must work with transferees to ensure that the new 
information and documents are transferred and that borrowers are not 
adversely affected.\17\ A borrower that submits a facially complete or 
complete application to the transferor servicer after the transfer date 
has the same rights and protections that would have applied if the 
borrower had submitted the complete application to the transferee 
servicer.\18\ An application that was facially complete under Sec.  
1024.41(c)(2)(iv) with respect to the transferor servicer remains 
facially complete under the transferee servicer as of the date it was 
facially complete with respect to the transferor servicer. And if an 
application was complete with respect to the transferor servicer, but 
is not complete with respect to the transferee servicer, the transferee 
servicer must treat the application as facially complete as of the date 
the application was complete with respect to the transferor 
servicer.\19\
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    \15\ See CFPB Bulletin 2015-03. ``Compliance Bulletin: Private 
Mortgage Insurance Cancellation and Termination''.
    \16\ Comment 38(b)(4)(i)-2.
    \17\ See Amendments to the 2013 Mortgage Rules Under the Real 
Estate Settlement Procedures Act (Regulation X) and the Truth in 
Lending Act (Regulation Z), 81 FR 72160, 72273-76 (Oct. 19, 2016); 
comments 38(b)(4)(i)-2 and 41(k)(1)(i)-1.iii.
    \18\ See 12 CFR 1024.41(k)(1)(i); Comment 41(k)(1)(i)-2.
    \19\ Comment 41(k)(1)(i)-2.
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    Appendix A provides examples of information and documents grouped 
by subject area which the Bureau intends to use to assess compliance 
with Regulation X. The appendix is provided as a guide and focuses on 
common data elements essential to the servicing of mortgage loans. 
Servicers may use the appendix to assess the baseline appropriateness 
of their transfer-related policies and procedures. Some listed 
documents and information may be not applicable to certain loans. Other 
loans may require documents and information not listed in Appendix A. 
The overall composition and complexity of a servicer's portfolio is 
important in determining whether its policies and procedures meet the 
objectives outlined in Regulation X. For example, servicers with very 
few adjustable rate mortgages might have relatively simple policies and 
procedures for ensuring documents and information related to interest 
rate adjustments are timely transferred and accounted for. And 
servicers with large default portfolios might have robust policies and 
procedures for ensuring that loss mitigation documents and information 
pertaining to defaulted accounts are timely transferred.
Regulatory Requirements
    This Bulletin is a non-binding general statement of policy 
articulating considerations relevant to the Bureau's exercise of its 
supervisory authority under Regulation X and RESPA and reciting certain 
requirements of Regulation X and other Federal consumer financial laws 
applicable to servicing transfers. It is therefore exempt from the 
notice and comment rulemaking requirements under the Administrative 
Procedure Act pursuant to 5 U.S.C. 553(b).\20\ Because no notice of 
proposed rulemaking is required, the Regulatory Flexibility Act does 
not require an initial or final regulatory flexibility analysis. 5 
U.S.C. 603(a), 604(a). The Bureau has determined that this Bulletin 
does not impose any new or revise any existing recordkeeping, 
reporting, or disclosure requirements on

[[Page 25284]]

covered entities or members of the public that would be collections of 
information requiring OMB approval under the Paperwork Reduction Act, 
44 U.S.C. 3501 et seq.
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    \20\ However, this is not a ``statement of policy'' as that term 
is specifically used in Regulation X, 12 CFR 1024.4(a)(1)(ii).
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    Pursuant to the Congressional Review Act, 5 U.S.C. 801 et seq., the 
Bureau will submit a report containing this Bulletin and other required 
information to the United States Senate, the United States House of 
Representatives, and the Comptroller General of the United States prior 
to its applicability date. The Office of Information and Regulatory 
Affairs has designated this Bulletin as not a ``major rule'' as defined 
by 5 U.S.C. 804(2).

Appendix A--Examples of Information and Data To Be Transferred or 
Received 21
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    \21\ This is not an exhaustive list of documents and information 
that may be necessary for the transfer.
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I. Foundational Loan Information

 Name and version of servicing systems of record for each 
product type serviced
 Loan number and MIN
 Principal balance
    [cir] Original principal balance
    [cir] Modified principal balance
 Periodic payment due
    [cir] Amount of interest due
    [cir] Amount of principal due
    [cir] Next payment due date
    [cir] Amount of any overdue payment
 Amount of any principal prepayments
 Amount of funds in suspense account
 Balloon payment data
 Origination date
 Property address
 Borrower mailing address
 Name of originator, NMLS ID if available
 Original loan to value
 Purchase loan/refinance
 Loan term
 Maturity date
 Successor-in-interest
    [cir] If yes
    [cir] Address and identity
    [cir] Confirmed?
 Occupancy code (i.e. primary residence, second home, 
investment property)
 Interest rate
 Interest calculation method (i.e. 30/360, DSI)
 ARM loan
    [cir] Index
    [cir] Margin
    [cir] Next change date
 Loan Type
    [cir] FHA
    [cir] VA
    [cir] USDA
    [cir] Conventional
    [cir] State bond program
 Fees owed and whether reimbursable/collectible from borrower 
or investor
    [cir] Late fees
    [cir] Broker price opinion fees owed
    [cir] Property inspection fees owed
    [cir] Attorney fees owed
    [cir] Publication fees owed
    [cir] Fees owed for copies of documents
    [cir] Corporate advances owed
    [cir] Prior bankruptcy
    [ssquf] Discharge date
    [ssquf] Dismissal date

II. Investor Information

 Name
 Contact Information
 Disbursement Information
 Reporting Requirements
 Remittance type (Scheduled/scheduled, scheduled/actual, 
actual/actual)

III. Escrow Accounts

 Amount of escrow payment due with periodic payment
 Date of last escrow analysis
 Tax agency code for each applicable agency
 Date of last tax payment to local agency
 Estimated total tax payments for next cycle
 Next tax due date(s)
 Parcel number (if multiple parcels include all)
 Date of last insurance payment
 Identity of insurer
 Confirmation of proof of adequate insurance received
 Historic escrow records (to address borrower questions and 
disputes)
 Tax service contracts that will stay in effect
 For any items paid from the escrow account other than taxes or 
insurance,
    [cir] Identity of the payee
    [cir] Due date(s) of payment
    [cir] Date of last payment and date of next payment
    [cir] Estimated payments for the next cycle, and other information 
necessary to maintain payment of such item pursuant to the escrow 
account agreement.

IV. Private Mortgage Insurance

 Amount last paid
 Name and address of insurer
 Amount due
 Date due
 Original value of the property
 The date based on amortization schedule(s) when a borrower may 
request cancellation
 Date on which monthly premiums are no longer required for 78% 
loan to original value
 Date on which monthly premiums are no longer required based on 
loan midpoint

V. FHA Insurance

 MIP amount
 MIP last paid
 MIP due
 MIP due date
 Loan origination date
 Loan term
 Partial claim amount, if any
 FHA case number assignment date
 MIP cancellation date based on original amortization

VI. Hazard Insurance/Flood Insurance

 Policy numbers
 Name and address of insurer (voluntary and lender placed)
 Expiration/renewal date(s)
 Premium amount(s)
 Frequency of payment
 Coverage levels
 Original value of property
 Flood zone determination certificate
 Prior completed insurance claims
 Open insurance claims
    [cir] Claim amount
    [cir] Loss draft funds held
    [cir] Inspection dates and completion estimates

VII. Loss Mitigation (Including Short-Term Options)

 Current status of discussions with a borrower on a loss 
mitigation option
 Any agreements made with a borrower on a loss mitigation 
option
 Any analysis by a servicer with respect to potential recovery 
from a non-performing mortgage loan
 Copies of complete and incomplete loss mitigation 
application(s) and information and documents submitted in conjunction 
with the application, including acknowledgment notices and denial 
notices
    [cir] Date of forbearance, modification or other loss mitigation 
option
    [cir] New loan amount
    [cir] New payment amount (show Principal and Interest as well as 
taxes and insurance, if applicable.)
    [cir] Term
    [cir] Due date of plan
    [cir] Denial date
    [cir] Denial reason
    [cir] New gross modification amount
    [cir] Modified appraisal value

VIII. Foreclosure

 Status of foreclosure
 Date referred to attorney
 Attorney name and contact information

[[Page 25285]]

 Publication date
 Anticipated or scheduled sale date
 All time line step and events
 Borrower contact information
 All phones numbers on file
 Email addresses for all borrowers

IX. Bankruptcy

 Notice of bankruptcy/court and case number
 Bankruptcy chapter and filing date
 Status of case
 Proof of Claim filing date
 Next prepetition and post-petition payment due dates
 Motion for Relief filing date
 Plan conversion date, if applicable
 Attorney acknowledgement of bankruptcy
 Other bankruptcy documents

X. Signing Authority

    The Director of the Bureau, having reviewed and approved this 
document is delegating the authority to electronically sign this 
document to Laura Galban, a Bureau Federal Register Liaison, for 
purposes of publication in the Federal Register.

    Dated: April 24, 2020.
Laura Galban,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2020-09151 Filed 4-30-20; 8:45 am]
 BILLING CODE 4810-AM-P

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