CFPB COVID-19 Regulation X Compliance Review
Section 1024.41(f)(3)
To help our clients comply with the new temporary CFPB requirements for Section 1024.41(f)(3), National Bankruptcy Services, LLC (“NBS”) can Validate Evidence Of Procedure Safeguards prior to first legal or filing for foreclosure. NBS will review and confirm our client’s servicing system and documentation complies with the requirements of the CFPB COVID 19 Regulation X Compliance Review. This enables our clients to use their existing staff to support standard foreclosure and loan workout processes, eliminates training expenses for a temporary requirement, and provides an additional layer of compliance through a third-party verification that demonstrates to regulators the process has been completed. The end result of which is a further reduction of your company’s servicing risk.
CFPB Requirements:
“Record retention. The Bureau is also adding new comment 41(f)(3)-1 to clarify record retention requirements for 1024.41(f)(3). It provides that, as required by 1024.38(c)(1), a servicer shall maintain 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. It clarifies that, if the servicer makes the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process before January 1, 2022, these records must include evidence demonstrating compliance with 1024.41(f)(3), including, if applicable, evidence that the servicer satisfied one of the procedural safeguard requirements described in 1024.41(3)(ii). It also provides examples of information and documents required to be retained, depending on the procedural safeguard on which the servicer relies to make the first notice or filing while 1024.41(f)(3) is in effect. “
Effective Dates Of CFPB Requirements:
Effective 8/31/2021, and expires on 1/1/2022
Requirements Of Client To NBS:
· Provide NBS “read only” system access, for the validation review process.
· Provide NBS a copy of the client’s “checklist” of items to validate have been completed.
Checklist items shall include, but not necessarily be limited to, the following:
o Does the loan meet a general Reg X exception based on the loan type (non-closed end, primary resident account)?
o Due Date. Was the account >120 days delinquent as of 3/1/2020 and has not yet cured the related delinquency?
o SOL Review. Will an applicable statute of limitations expire before 1/1/2022?
o First Notice of Filing. Was the first notice of filing for the related delinquency filed before 8/31/2021?
o Procedural Safeguard – Loss Mitigation Review. Was the account evaluated for loss mitigation in current delinquency and have existing foreclosure protections been met?
o Procedural Safeguard – Property Status. Property securing the mortgage loan is considered abandoned according to the laws of the State / municipality where it is located.
o Procedural Safeguard – Property has had unresponsive borrower against CFPB COVID-19 Servicing Rules.
For Additional Information, Please Contact:
Jim O'Reilly
Senior Vice President
National Bankruptcy Services, LLC
14841 Dallas Parkway, Suite 300
Dallas, TX 75254
Direct Line: 214-860-6973
Fax: 972-499-8756