You get a request for information on a mortgage loan from a person claiming that they are a successor in interest on the property securing the loan. Now what do you do? It seems like there's a lot of confusion around what the Servicing Rule requires for requests for information received from potential successors in interest.
Before we look at how to respond to requests from potential successors in interests, let's take a look at how you are to respond to requests for information from a borrower so that you can see how the normal process works:
- You receive a request;
- You send an acknowledgement of the receipt within five business day (unless you respond under number three within this timeframe);
- After searching your system for the requested information or documents, you either provide the requested information or inform the consumer that you do not have the information, including the basis for the determination and the contact information, including a telephone number, for further assistance. This must be done within 10 business days for a request for the identity of, and address or other relevant contact information for, the owner or assignee of a mortgage loan or 30 business days for all other requests.
In your response, you can omit location, contact information and any personal financial information (other than information about the terms, status and payment history of the mortgage loan) if the information pertains to a potential, or confirmed, successor in interest who is not the requester; or the requester is a confirmed successor and the information pertains to any borrower who is not the requester.
After you have provided the information in number three above, you are done. If another request is made, it is a new request and the process starts over. Except that, if the new request is substantially the same as the previous request, you do not have to follow the process outlined above. Instead, you send a written notice within five business days stating that you have determined the request to be substantially the same as the request you have previously responded to.
Now, let's look how this changes with a request from a successor in interest. If it's a confirmed successor in interest, it's easy. The process doesn't change at all. You follow the exact same process as outlined above. If a potential successor in interest sends in a request for information that includes the name of the transferor borrower and information that enables you to identify the account, you satisfy number three above by sending a written description of the documents you reasonably require to confirm their identity and ownership interest in the property, contact information (including a telephone number) for further assistance and a statement that they may resubmit any request for information once confirmed as a successor in interest. If the potential successor in interest's request does not provide sufficient information to enable you to identify the documents you reasonably require to confirm their identity and ownership interest in the property, you can satisfy number three above by:
- Including examples of documents typically accepted to establish a person's identity and ownership interest in a property;
- Stating that they may obtain a more individualized description of the required documents by providing additional information;
- Specifying what additional information is required to enable you to identify the required documents; and
- Providing contact information, including a telephone number, for further assistance.
This is all the information that you give to a potential successor in interest. Once you have provided this information, you have satisfied number three above and that request is closed. If the potential successor in interest provides the documents required to confirm their identity and ownership interest, you treat the original request along with the new information, as a new request. This new request is not subject to the duplicative request rule described above.
Request from potential successors in interest are subject to the same time limits as described in number three above for borrowers. There is some ambiguity in the rule as to whether you must send the acknowledgement within five business days as the rule expressly states that you must treat the request as if it came from the borrower but that you must provide only the information as outlined above for potential successors in interest. Therefore, I recommend that you respond to all requests from successors in interest within the five-business-day period.