Servicing Provisions For the Small Servicer

January 30th, 2018 by James Atkinson

As anyone who deals with their own vehicle maintenance to any degree realizes, part of the trick is figuring out what does and does not apply to your particular vehicle. Does my vehicle have a 15 bolt transmission gasket, a 17 bolt, or a 19 bolt and does my vehicle have a transmission filter to buy or a screen – no matter the make and model, there can be numerous options. Then to take it a step further, should I buy the off the shelf transmission fluid that says it works for my Toyota or do I need to buy the actual Toyota fluid to be absolutely safe even though it is more expensive...a transmission is a costly thing to mess up to save a few dollars on fluid.

The same can be said for the Small Servicer provisions effective October 19, 2017 from the 2016 Mortgage Servicing Rule of the CFPB. In very simplistic terms, a small servicer is one that services 5,000 or fewer consumer mortgages which they or an affiliate owned or originated. Yet, listen to any vendor presentation and it becomes quite confusing just what is and is not applicable to the small servicer vs. the large servicers. There are several reasons for this, covering the whole audience, the way the regulation itself is written, and other factors that tend to overlap the small versus large servicers. For example, that which a vendor provides for your institution may actually coincide to large servicer standards though you are in actuality a small servicer and no matter if you are a small servicer or a large servicer, it pays to take heed of any FCRA aspects of the Servicer provisions (better buy that more expensive Toyota fluid to be absolutely safe).

These factors considered, your next step of Servicer Provision applicability involves knowing your institution and its business mode. At that step you may find that because of your business mode, you can skip over the sections on coupon books, ARM Servicing Provisions, and Consumer Force Placed Insurance (because your institution has a master policy vs. consumer force placed insurance).

Now you are at the point where the mass of what applies to you as a smaller servicer involves Definition of Delinquency, Prompt Crediting of Payments, Written Notice of Error, Written Request for Information, and a few segments of the Foreclosure Timing Provisions.

Heck, I can return that transmission filter, my vehicle had a screen and once I sorted out what I needed, it was not that bad at all!!! The issue was just sorting out what applied.