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Subject 80-11-6 MORTGAGE SERVICING

Rule 80-11-6-.01 Definitions

(1) As used in Chapter 80-11-6, the terms that are defined in O.C.G.A. §§ 7-1-4 and 7-1-1000 shall have the identical meaning.
(2) As used in Chapter 80-11-6, the below terms shall be defined as follows unless the term is otherwise defined in a specific rule:
(a) "Complete loss mitigation application" means an application in which a servicer has received all of the information that the servicer requires from a borrower in evaluating applications for loss mitigation options available to the borrower. A servicer shall exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application.
(b) "Notice of error" means any written notice from the borrower that asserts an error and that includes the name of the borrower, information that enables the servicer to identify the borrower's mortgage loan account, and the error the borrower believes has occurred. A notice on a payment coupon or other payment form supplied by the servicer need not be treated by the servicer as a notice of error.

Rule 80-11-6-.02 Mortgage Servicing Standards

(1) The standards set forth in this Rule apply only to persons licensed, registered, or required to be licensed or registered under Article 13 of Chapter 1 of Title 7 of the Official Code of Georgia Annotated.
(2) Except as set forth in paragraph (7) of this Rule, any person who services a closed-end mortgage loan ("servicer"):
(a) Shall act with reasonable skill, care, and diligence;
(b) Shall not charge fees for:
1. Handling borrower disputes;
2. Facilitating routine borrower collections;
3. Arranging repayment or forbearance plans;
4. Sending borrowers notice of nonpayment;
5. Updating records to reinstate a mortgage loan; and
6. Late payment in excess of the initial late payment fee, as provided by 12 C.F.R. § 1026.36(c)(2).
(c) Except as set forth in section (d) below, shall not commence a foreclosure process while a borrower's complete loss mitigation application is pending ("dual-tracking");
(d) Shall not conduct a foreclosure sale before evaluating the borrower's complete loss mitigation application in the event the complete loss mitigation application is received after a foreclosure process has been commenced and more than 37 days before the foreclosure sale.
(e) Shall consider loss mitigation whenever possible and, at a minimum:
1. Acknowledge receipt of a borrower's initial loss mitigation application within 5 business days of receipt;
2. Upon receipt of a borrower's initial loss mitigation application, provide name, address, and a collect call or toll-free telephone number for an employee or department of the servicer that can be contacted by the borrower regarding loss mitigation application inquiries;
3. Upon receipt of a borrower's initial loss mitigation application, identify requirements for loss mitigation options, if available; and
4.
(i) Evaluate a borrower's eligibility for available loss mitigation options within 30 days of receipt of loss mitigation application if a servicer receives that loss mitigation application more than 37 days before a foreclosure sale or
(ii) In the event a servicer is not required to evaluate the loss mitigation application under subsection (i), the servicer shall either notify the borrower that the loss mitigation application was not timely or evaluate the loss mitigation application.
(f) Shall have a process for borrowers to appeal loss mitigation disputes, including, but not limited to, a formal review of loss mitigation options, to personnel different than those responsible for previous evaluations or provide an option for borrowers to mediate such disputes if the loss mitigation application was received 90 days or more before a foreclosure sale;
(g) Shall have an error resolution process for all borrowers, unless expressly excluded pursuant to 12 C.F.R. § 1024.35(g), which must, at a minimum:
1. Acknowledge receipt of a borrower's notice of error within 5 business days of receipt;
2. Conduct a reasonable investigation; and
3. Within 45 days, except where prompter compliance is required by 12 C.F.R. § 1024.35(e)(3) or alternative compliance is provided in 12 C.F.R. § 1024.35(f), provide a borrower with a written notification of:
(i) the correction of error or
(ii) the servicer's determination that no error occurred and the reason for such determination.
(h) Shall apply payments to the principal and interest first, rather than the insurance, taxes, and fees of the mortgage loan, except where inconsistent with federal law;
(i) Shall not assess on a borrower any charge or fee related to force-placed insurance, unless the servicer has a reasonable basis to believe the borrower has failed to comply with the mortgage contract's requirements to maintain insurance; and
(j) Shall not obtain force-placed insurance for a borrower that imposes an unreasonable charge or fee related to the force-placed insurance.
(3) If the terms of a mortgage loan require the borrower to make payments to the servicer of the mortgage loan for deposit into an escrow account to pay taxes, insurance premiums, and other charges for the residential property, the servicer shall make payments from the escrow account in a timely manner, that is, on or before the deadline to avoid a penalty, as long as the borrower's payment is not more than 30 days overdue.
(4) Each servicer shall submit to the Nationwide Multistate Licensing System and Registry reports of condition in accordance with O.C.G.A. § 7-1-1004.1 containing information detailing the servicer's activities, including, but not limited to:
(a) The number of mortgage loans serviced;
(b) Delinquency status of mortgage loans serviced;
(c) The number of mortgage loan modifications; and
(d) The number of foreclosures.
(5) Each servicer shall make the following disclosures in writing to borrowers:
(a) At the time a servicer acquires the right to service the closed-end mortgage loan the following initial disclosures:
1. Complete and current schedule of servicing fees;
2. The name, address, and a collect call or toll-free telephone number for an employee or department of the servicer that can be contacted by the borrower regarding servicing; and
3. A statement of the mortgage servicer standards set forth in paragraph (2) of this Rule including a description of the servicer's appeal process as required by paragraph (2)(f). However, a small servicer as set forth in 12 C.F.R. § 1026.41(e)(4)(ii) is not required to make the disclosures set forth in paragraph (2)(c), (d), (e), and (f).
(b) As required by federal law, including, but not limited to, 12 C.F.R. § 1024.33, upon the transfer of its right to service a closed-end mortgage loan within the period of time required by federal law, the following subsequent disclosures:
1. The effective date of the transfer of servicing;
2. The name, address, and a collect call or toll-free telephone number for an employee or department of the transferee servicer that can be contacted by the borrower to obtain answers to servicing transfer inquiries;
3. The name, address, and a collect call or toll-free telephone number for an employee or department of the transferor servicer that can be contacted by the borrower to obtain answers to servicing transfer inquiries;
4. The date on which the transferor servicer will cease to accept payments relating to the mortgage loan and the date on which the transferee servicer will begin to accept such payments. These dates shall either be the same or consecutive days;
5. Whether the transfer will affect the terms or the continued availability of mortgage life or disability insurance, or any other type of optional insurance, and any action the borrower must take to maintain such coverage; and
6. A statement that the transfer of servicing does not affect any term or condition of the mortgage loan other than terms directly related to the servicing of the loan.
(c) The disclosure requirements set forth in section (a) of this paragraph shall not apply to any assignment, sale, or transfer of the servicing of any closed-end mortgage loan if the person who makes the loan provides to the borrower, at settlement (with respect to the property for which the mortgage loan is made), written initial disclosures of the transferee that comply with section (a) of this paragraph.
(d) The disclosure requirements set forth in section (b) of this paragraph shall not apply to any assignment, sale, or transfer of the servicing of any closed-end mortgage loan if the person who makes the loan provides to the borrower, at settlement (with respect to the property for which the mortgage loan is made), written notice of such transfer that complies with section (b) of this paragraph.
(6) If a servicer discovers a violation of these standards, the servicer:
(a) Has a duty to mitigate the harm to the borrower;
(b) Shall maintain a record of such violation in accordance with Rule 80-11-6-.04(1)(c); and
(c) Shall report to the department within 10 days of discovery any violation that, at the time of discovery, has the potential to result in aggregate financial harm to the borrower(s) in excess of $1,000.00.
(7)
(a) Sections 2 (c), (d), (e) and (f) of this Rule shall not apply to a servicer that qualifies as a "small servicer" pursuant to 12 C.F.R. § 1026.41(e). However, nothing herein shall be deemed to excuse a "small servicer", as defined in 12 C.F.R. § 1026.41(e), from complying with the requirements of applicable federal law including, but not limited to, 12 C.F.R. § 1024.41(j).
(b) Sections 2(e)(2) - (4) of this Rule shall not apply to a servicer who has previously complied with the requirements of those sections for a complete loss mitigation application submitted by the borrower and the borrower has been delinquent at all times since submitting the prior complete loss mitigation application. In the event a servicer is not required to comply with sections 2(e)(2) - (4) of this Rule, the servicer shall either notify the borrower that the loss mitigation application was duplicative or evaluate the loss mitigation application.
(8) Failure to adhere to these standards may result in revocation of the license or registration and will subject the licensee or registrant to fines in accordance with regulations prescribed by the department, including Rule Chapter 80-11-3.

Rule 80-11-6-.03 Mortgage Servicer Location Requirements and Minimum Retention Periods

(1) Each servicer must maintain required books, accounts, and records at the principal place of business. Should a servicer wish to maintain such records elsewhere, it must notify the department in writing prior to said books, accounts, and records being maintained in any place other than the designated principal place of business. Such notification shall be submitted to the Department of Banking and Finance, 2990 Brandywine Road, Suite 200, Atlanta, Georgia 30341.
(2) Books, accounts, and records maintained at a location other than the principal place of business shall be made available to the department within five (5) business days from the date of written request by the department and at a reasonable and convenient location acceptable to the department.
(3) "Principal place of business" means the location designated as the main office by the licensee or registrant in the initial written application for licensure or registration or as amended thereafter in writing to the department.
(4) All books, accounts, and records required by Rule 80-11-6-.04(1)(a) must be maintained in accordance with Rule 80-11-2-.01(4). All books, accounts, and records required by Rule 80-11-6-.04(1)(b) must be maintained for a period of five (5) years after the date a mortgage loan is discharged or servicing rights for a mortgage loan are transferred by the servicer to a transferee servicer or otherwise terminated.
(5) Any books, accounts or records required to be maintained by Rule Chapter 80-11-6 of the Rules of the Department of Banking and Finance may be maintained in their original form, on microfiche or other electronic media, provided:
(a) that the records shall be made available to the department as provided in this Rule; and
(b) at the request of the department, the records shall be printed on paper for inspection or examination.
(6)
(a) The penalty for maintaining books, accounts, and records at a location other than the principal place of business without written notification to the department may be suspension of the license or registration, other appropriate administrative action or fine.
(b) The penalty for refusal to permit an investigation or examination of books, accounts and records (after a reasonable request by the department) shall be revocation of the license or registration.

Rule 80-11-6-.04 Minimum Requirements for Books and Records

(1) Each servicer must maintain the following books, accounts, and records:
(a) Copies of all documents required by Rule Chapter 80-11-3;
(b) Servicer file for each mortgage loan that it services. The servicer file must contain the following:
1. the name of each borrower;
2. copies of all contracts, deeds, assignments, letters, notes, and memos regarding the borrower;
3. documents related to assignment, sale, or transfer of mortgage loan servicing;
4. copies of all disclosures or notices provided to the borrower by the servicer as required by law, including Rules 80-11-1-.01 and 80-11-6-.02;
5. copies of all written requests for information received from the borrower and the servicer's response to such requests as required by law;
6. full payment history that identifies and itemizes payments made by or on behalf of the borrower, all fees and charges assessed under the mortgage loan transaction, and escrow account activity;
7. a copy of any bankruptcy plan approved in a proceeding filed by the borrower or a co-owner of the property subject to the mortgage loan;
8. a communications log, which documents all verbal communication with the borrower or the borrower's representative;
9. a record of all efforts by the servicer to comply with the duties required under Rule 80-11-6-.02(2)(d), including all information utilized in the servicer's determination regarding loss mitigation proposals offered to the borrower;
10. a copy of all notices sent to the borrower related to any foreclosure proceeding filed against the encumbered property; and
11. records regarding the final disposition of the mortgage loan including a copy of any collateral release document, records of servicing transfers, charge-off information, or REO disposition.
(c) A list of all servicer's violations, if any, of the mortgage servicer standards set forth in Rule 80-11-6-.02.
(2) Failure to maintain the books, accounts, and records required under paragraph (1) above may result in suspension of the license or registration or other appropriate administrative action and will subject the licensee or registrant to fines in accordance with regulations prescribed by the department.