Sec. 212. Approval of servicers
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/bill/113/s/1217/rs/section-212A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Corporation shall develop, adopt, and publish standards for the approval by the Corporation of servicers to administer eligible mortgages, including standards with respect to— the collection and forwarding of principal and interest payments; the maintenance of escrow accounts; the collection and payment of taxes and insurance premiums; the maintenance of records on eligible mortgages; the establishment of foreclosure loss mitigation programs that seek to enhance investor value and prevent, to greatest extent possible, the need to trigger any claim on insurance offered by the Corporation pursuant to this title; the advancement of principal and interest payments to investors in the case of a delinquency by a borrower until such time as the borrower has made all payments in arrears or the property securing the eligible mortgage has been liquidated; and implementing the terms of any loss mitigation and foreclosure prevention as required by a uniform securitization agreement developed under section 223.
The standards required under paragraph
(1)shall also include— the financial history and condition of the servicer; the general character and fitness of the management of the servicer, including compliance history with Federal and State laws; the risk presented by such servicer to the Mortgage Insurance Fund; a requirement that the servicer submit audited financial statements to the Corporation; and any other standard the Corporation determines necessary or appropriate. In developing the standards required under paragraph (1), the Corporation shall— coordinate with the Bureau of Consumer Financial Protection; and to the extent the Corporation determines practical and appropriate, shall coordinate with the other Federal banking agencies. The Corporation shall establish an application process— in such form and manner and requiring such information as the Corporation may require, for the approval of servicers under this section; and that does not discriminate against or otherwise disadvantage small servicers. The Corporation may approve any application made pursuant to paragraph
(1)provided the servicer meets the standards adopted under subsection (a). The Corporation shall— publish in the Federal Register a list of newly approved servicers; and maintain an updated list of approved servicers on the website of the Corporation. The Corporation may review the status of any approved servicer if the Corporation is notified of or becomes aware of any violation by the servicer of this Act or the rules promulgated pursuant to this Act, including any failure by an approved servicer to comply with terms set forth in any uniform securitization agreement developed under section 223. If the Corporation determines, in a review pursuant to paragraph (1), that an approved servicer no longer meets the standards for approval, the Corporation may suspend or revoke the approved status of such servicer. The suspension or revocation of an approved servicer's approved status under this paragraph shall have no effect on the status of any covered security. The Corporation shall— publish in the Federal Register a list of any approved servicers who lost their approved status; and maintain an updated list of such servicers on the website of the Corporation. A servicer who submits an application under subsection (b)(1) to become an approved servicer may appeal a decision of the Corporation denying such application. An approved servicer may appeal a decision of the Corporation suspending or revoking the approved status of such servicer. Any servicer who files an appeal under paragraph
(1)shall file the appeal with the Corporation not later than 90 days after the date on which the person receives notice of the decision of the Corporation being appealed. The Corporation shall make a final determination with respect to an appeal under paragraph
(1)not later than 180 days after the date on which the appeal is filed under paragraph (2). The Corporation shall develop a process by which private market holders of the first loss position in a covered security may petition the Corporation for a change in approved servicers if the private market holders can demonstrate that their current approved servicer has failed to appropriately protect their investment, including by failing to meet any standard identified under subsection (a)(1).