Monthly Regulatory Compliance Change Management Summary

Linked here please find our monthly Regulatory Compliance Change Management Summary as of September 30, 2020. 

This month’s Regulatory Compliance Change Management conference call will take place on Thursday, October 29, at 3p.m. EST. To register for the monthly call, please email compliancechgmngt@cenlar.com. For your convenience, the call will be recorded and made available to clients who are unable to attend.  If you have already registered for a previous call there is no need to request registration again. Please submit any questions related to the regulatory change management to the mailbox prior to the call.

Any questions related to the monthly summary, overview process, or specific regulatory change items can be sent directly to compliancechgmngt@cenlar.com and the Compliance Department will respond within 2 business days of receipt (excluding weekends and holidays).

Two items, listed below, are showing as “Out of Compliance” (effective date has passed and we are beyond our standard implementation timeframe) on our September report.  The rationale for the risk rating is included and these items continue to be implemented.

  • Q7001 New York SB 8428 (Effective 6/17/2020): New York has passed a bill to add a new section 9-x to Article 1 of the New York Banking Law. The new law will require New York regulated institutions to grant 180 days of forbearance, with the option to extend an additional 180 days, to residential mortgagors demonstrating financial hardship as a result of the COVID-19 pandemic. This new section also allows for any mortgagor granted forbearance to extend their loan for the length of the forbearance; have the arrears accumulated during the forbearance period payable on a monthly basis for the remaining term of the loan; to complete a loan modification or—if the borrower and servicer can’t come to an agreement—offer to defer the arrears as a lump sum payment due at the maturity of the mortgage or when the loan is paid off. This change item has been deemed to be medium risk because we are working with the business units and BKFS to operationalize repayment plan options. Loss Mitigation and the Default Call Center are finalizing procedures and creating a new letter regarding the repayment plan.
  • Q7086 New York City’s New Limited English Proficiency Rules for Creditors and Debt Collectors (Effective 8/26/20): The New York City Department of Consumer Affairs (Department) is adding new rules that require debt collectors to inform consumers about whether certain language-access services are available and to retain records relating to language-access services.  This change item has been deemed to be a low risk because Cenlar does not provide false, inaccurate, or incomplete translations of any communication to a consumer in the course of attempting to collect a debt, or misrepresent or omit a consumer’s language preference when returning, selling, or referring for litigation on any consumer account. Default Compliance and the Default Call Center are finalizing procedures and letters.

Action Items:  

  • Q5908.3 FNMA Servicing Guide Updates SVC 2019-07 (Effective 3/31/2020):  FNMA has updated its Servicing Guide to make the following change: Reporting Anti-Money Laundering Activity. All servicers must now report loan-level instances of suspicious activity using the self-report functionality in Loan Quality Connect.
Clients need to provide Cenlar access to their Seller/Servicer ID in Loan Quality Connect as we are unable to report for suspicious activity without this access.
  • Q7310 Montana REG: ARM 2.59.1743: Licensing Requirements (Effective 08/29/2020):  For entities which are licensed Montana Mortgage Servicers under the Mortgage Brokers or Loan Originators licensing requirements, the reporting submission time frame required by Montana Admin. R. 2.59.1743 has been extended for the quarters ending June 30, 2020, September 30, 2020, December 31, 2020, and March 31, 2021. The deadline for submission is extended by 30 days to allow the reports to be submitted within a total of 75 days after the end of each quarter.  This short-term change (temporary rule) to extend the due date of the submission of the Quarterly Statement of Montana Mortgage Servicing Activity reports is to provide mortgage servicers with more time to provide the information due to COVID-19 related closures.
Cenlar is aware of this notice of amendment from the state of Montana. While Cenlar is a federally regulated entity, it is not licensed in the state of Montana and not responsible for the above reporting submission. Clients who do report this data should be aware that failure to comply may result in regulatory sanctions, fines or penalties.
  • Q7346 NYDFS Guidance to New York State Regulated Mortgage Lenders and Servicers Relating to Fees Paid to Register Mortgages in Default (Effective Date 9/1/2020): Certain counties, cities and other municipalities in New York State are requiring mortgage lenders and servicers (“Mortgagees”) to register mortgages declared to be in default by the Mortgagee with the county, city or other municipality in which the real property is situated. The Mortgagee is required to pay a fee to the county, city, municipality or its agent (a “Registration Fee”), and it has come to the attention of DFS that such Registration Fees have been charged to, or collected from, mortgagors’ accounts by some Mortgagees. This fee is not permitted to be collected from the mortgagor; therefore, if a fee has been collected a refund or credit must be issued to the borrower.
While Cenlar is not regulated by the NYDFS, and therefore not required to report to or pay a registration fee to the NYDFS, clients that are required to report this data should be aware that failure to comply may result in sanctions, fines or penalties. Mortgagees subject to the requirements of Part 419 and who, at any time, have collected any Registration Fees from a mortgagor, are hereby directed and instructed to refund and credit the full amount of such Registration Fees to the account of the mortgagor. If the Registration Fee was charged to a mortgagor’s account but was not collected, Mortgagees are hereby directed and instructed to remove and reverse any and all Registration Fees charged to the mortgagor’s account. Mortgagees are also directed and instructed to create a log of all mortgagors that were either charged, or paid any Registration Fee to any such Mortgagees at any time, containing details of the full amounts of such Registration Fees, whether collected or charged, and the date(s) the full amounts of collected Registration Fees were refunded and credited to the mortgagors’ accounts, and the date(s) that any charged Registration Fees were removed or reversed from the mortgagors’ accounts, for inspection during NYDFS’s next examination of the Mortgagee.