N.Y. Comp. Codes R. & Regs. tit. 3 § 419.9

Current through Register Vol. 46, No. 45, November 2, 2024

Section 419.9 - Books and records and annual reports

(a)In general.

This section applies to each servicer that is either registered or required to be registered with the superintendent or that is an exempt organization regulated by the superintendent. Each servicer shall:

(1) keep such books and records in a manner that will allow the superintendent to determine whether the servicer is complying with applicable laws and regulations; and

(2) preserve its books and records for at least three years after making the final entry with respect to any New York mortgage loan being serviced by the servicer, unless a longer period is provided by statute. At a minimum, books and records must provide information regarding:

(i) loan payments received, disbursements made and the dates of transactions for each account;

(ii) the principal balance of each loan account;

(iii) the amount and due date of each loan installment for each loan serviced;

(iv) the servicing history for all mortgage loans serviced by the servicer, including the servicing history of loans acquired from another entity, provided that the servicer is only required to maintain records of any prior servicer of a loan to the extent that such information is reasonably available; and

(v) the servicing of delinquent loans, including loans in foreclosure.

(b)Telephone and written communications.

The servicer must, for three years, maintain a log of all telephone calls and file of all written correspondence, including fax transmissions and e-mail correspondence, relating to the servicing of each mortgage loan, including, but not limited to communications and correspondence between it and:

(1) any previous loan servicer;

(2) the lender or mortgagee of such loan;

(3) the holder of the mortgage or person acting on the holder's behalf;

(4) the borrower, including but not limited to all communication and information relating to a complaint and documentation reflecting the date the servicer received the complaint, the name(s) of the servicer personnel assigned to investigate the complaint, the nature of the complaint, the status of the complaint (e.g., open, resolved), and the action the servicer has taken with respect to the complaint; and

(5) a governmental entity.

(c)Quality control and internal audit function.

The servicer must have internal controls (commensurate with the size and complexity of the servicing operations) which periodically assess the servicer's loan servicing to ensure that servicing standards and procedures are being met. At least annually, the servicer shall conduct an internal risk assessment of all its servicing activity. The servicer shall also conduct periodic audits of payment processing functions to ensure payments are properly credited, including payments remitted to the servicer via certified mail.

(d)Delinquency and foreclosure reports.

In addition to the quarterly reports required pursuant to section 419.8 of this Part, the servicer shall collect, maintain and analyze appropriate data on delinquency and foreclosure rates, as well as, its loss mitigation activity to enable it to:

(1) evaluate the effectiveness of its collection efforts and overall performance of its servicing portfolio; and

(2) identify discriminatory trends.

The servicer shall further determine how this data compares with rates in reports published by the industry, investors and others and analyze significant variances between its data and that found in reports and publications and take appropriate corrective action.

(e)Quarterly financial report and net worth certification.

Within 45 days of the end of each fiscal quarter, the servicer must submit to the department, in a format, prescribed by the superintendent, a quarterly financial report and certification of net worth.

(f)Annual audited financial statements.

Unless the superintendent in his or her sole discretion determines that other financial information may be substituted, the servicer shall submit an annual audited financial statement as of its fiscal year end to the department within 90 days of the close of the fiscal year. The financial statement shall be prepared in accordance with generally accepted accounting principles and audited by an independent certified public accountant in accordance with generally accepted auditing standards.

(g)Annual and other reports.

The superintendent may require servicers to file other regular or special reports, including reports with respect to mortgage delinquencies and foreclosures, annually or as otherwise requested by the superintendent. Such reports shall be in a form prescribed by the superintendent and, except as permitted by the superintendent, shall be subscribed and affirmed as true under the penalty of perjury.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 419.9

Amended New York State Register December 18, 2019/Volume XLI, Issue 51, eff. 12/18/2019