HOEPA Final Rule

The Federal Reserve has approved final HOEPA rules. Please see below for a review of the servicing components along with a link to the full summary provided by Ken Markison from the Mortgage Bankers Association.

Servicing Implications
Prohibits certain practices by servicers of closed-end consumer credit transactions secured by consumer’s principal dwelling including:

  • failing to credit a consumer’s periodic payment as of the date received, but creditors are not required to credit partial payments, and whether a payment is a full or partial payment is governed by the loan agreement or promissory note
  • imposing a late fee or delinquency charge where the only basis is consumer’s failure to include in a current payment delinquency charge imposed on earlier payments; and
  • failing to provide accurate payoff statement within reasonable time after request.

The Rule notes while the second  prohibition is already prohibited under other rules, by issuing the rule under HOEPA, State Attorney Generals can enforce rule against servicers. Final rule lacks proposed rule’s requirement that would have required current schedule of servicing fees and charges be given to consumer within a reasonable time upon request. However, as indicated, Board may consider servicing fees as part of Regulation Z mortgage disclosure review.

To view the full summary, please click here.

To view the rule in the Federal Register, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 500 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico

 

 

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