Sec. 3. Regulation and oversight of mortgage servicers
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Subpart A of part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 ( 12 U.S.C. 4541 et seq.) is amended by adding at the end the following new section: For purposes of this section, the following definitions shall apply: The term Director has the meaning given such term in section 1303. The term covered servicer means a servicer, as such term is defined in section 6(i) of the Real Estate Settlement Procedures Act of 1974 ( 12 U.S.C. 2605(i) ), that conducts mortgage servicing with respect to any single-family mortgage loans owned or guaranteed by any enterprise.
The Director shall establish standards, by regulation, for covered servicers relating to each of the following: Adequacy of internal controls and information systems, taking into account the nature and scale of business operations. Independence and adequacy of internal audit systems. Overall risk management processes, including adequacy of oversight by senior management and policies to identify, measure, monitor, and control material risks, including data protection and reputational risks.
Compliance with the mortgage servicing requirements under the Real Estate Settlement Procedures Act of 1974 ( 12 U.S.C. 2601 et seq.) and the regulations implementing such Act (12 C.F.R. Part 1024; Regulation X), in consultation with the Bureau of Consumer Financial Protection, including a system for solicitation and review of borrower complaints involving servicing of single-family housing mortgage loans owned or guaranteed by an enterprise. Documentation and retention of records related to borrower interactions that enable the Director to evaluate the quality of service given to borrowers, including borrower contact, delinquency management practices, loan modifications and foreclosure alternatives, and foreclosure timelines, which shall provide that in each instance involving a default under a loan, the covered servicer shall document and retain a detailed description of the actions such servicer took to comply with the enterprises’ loss mitigation review requirements, including efforts to establish borrower contact, solicit a loss mitigation application, review the application under the appropriate guidelines, and inform the borrower of the servicer’s decisions.
Such other operational and management standards as the Director determines to be appropriate to carry out the purposes of this Act. If the Director determines that a covered servicer fails to meet any standard established under subsection (b), the Director shall require the covered servicer to submit an acceptable plan, in writing, to the Director within the time allowed under subparagraph (C). Any plan required or authorized under subparagraph
(A)shall specify the actions that the covered servicer will take to correct the deficiency. The Director shall by regulation establish deadlines that— require a covered servicer to submit a plan required under this subparagraph not later than 30 days after the Director determines that the covered servicer fails to meet any standard established under subsection (a); and require the Director to approve, deny, or otherwise respond to the plan not later than 30 days after the plan is submitted. If a covered servicer fails to submit an acceptable plan within the time allowed under paragraph (1)(C), or fails in any material respect to implement a plan accepted by the Director, the following shall apply: The Director shall, by order, require the covered servicer to correct the deficiency. The Director may, by order, take one or more of the following actions until the deficiency is corrected: Impose a civil monetary penalty upon the covered servicer in an amount not to exceed $10,000 for each day during which such deficiency continues. Mandate the transfer of loan servicing rights without providing compensation to the covered servicer. Limit or prohibit the covered servicer from conducting business with the enterprises. Require the covered servicer to take any other action that the Director determines will better carry out the purposes of this section than any of the actions described in this subparagraph. In complying with paragraph (2), the Director shall take one or more of the actions described in clauses
(i)through
(iv)of paragraph (2)(B) if— the Director determines that the covered servicer fails to meet any standard prescribed under subsection (b); and the covered servicer has not corrected the deficiency within a reasonable period or within a period established by the Director. The authority of the Director under this section is in addition to any other authority of the Director and does not limit the additional or concurrent authority of the Bureau of Consumer Financial Protection as established in title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5481 et seq.). The Director shall conduct oversight of covered servicers on a regular and ongoing basis and in a manner designed to ensure that such servicers comply with the requirements of this Act and the regulations established by the Director for servicing of such mortgages and to identify systemic problems and trends with such compliance. The Director shall have power to make a thorough examination of any covered servicer whenever the Director determines an examination of any such servicer is necessary to carry out the purposes of this section. The Director may issue and revise examination manuals as necessary to carry out paragraph (1). The Director may assess and collect from covered servicers a reasonable fee, in an amount not exceeding the amount sufficient to provide for reasonable costs (including administrative costs) and expenses incurred by the Director in connection with carrying out the responsibilities of the Director under this section. The Director shall establish the amount of fees under this subsection for a fiscal year so as to generate a total revenue amount not exceeding the Director's estimate of 100 percent of the costs of the Agency in carrying out the responsibilities under this section during such year. Fees authorized under paragraph
(1)for a fiscal year shall be available for obligation only— to the extent and in the amount provided in advance in appropriations Acts; and to pay the costs of the Agency in carrying out the responsibilities under this section during such fiscal year. The Director shall issue such regulations as may be necessary to enable the Director to administer or to carry out the purposes of this section and to prevent evasions thereof. . The Director of the Federal Housing Finance Agency shall issue final regulations, as required by section 1327 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (as added by subsection
(a)of this section), not later than the expiration of the 12-month period beginning on the date of the enactment of this Act.
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- 12 CFR 1024
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Sec. 3
Regulation and oversight of mortgage servicers
Cite12 CFR 1024
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