ABRAMS GARFINKEL MARGOLIS BERGSON, LLP
Dynamic Legal Representation for You and Your Business


Subservicer Oversight

Q: How do I ensure my subservicer is following its policies and procedures?

A: The GSEs require all subservicers to follow GSE guidelines when servicing loans.  When utilizing a subservicer, the master servicer should have an oversight policy in place to ensure compliance. The policy should establish the master servicer's servicing Quality Control ("QC") Program and include, at a minimum:

  1. Procedures demonstrating how the master servicer verifies that the subservicer is actually following its own procedures;

  2. An explanation of how the master servicer implements quality control audits and when and how often such audits will be performed;

  3. A method to track subservicer servicing errors and deficiencies, as well as any remediation plans; and

  4. As a best practice, an annual onsite visit that permits the master servicer to sit with key subservicing staff to understand the staff's day-to-day process and reconcile it against the subservicer's written policies and procedures.
Subservicer deficiencies may range from warnings to heavy fines up to and including loss of the ability to service loans, therefore, it is important to ensure proper subservicer oversight and monitoring.


Share the AGMB Compliance Question of the Week:

Facebook   Google+   LinkedIn   Twitter

New York Attorney Advertising: This email is designed for general information only.
The information presented in this email should not be construed to be formal legal advice nor the
formation of a lawyer/client relationship. Prior results do not guarantee a similar outcome.

© Copyright 2017 by Abrams Garfinkel Margolis Bergson, LLP. All rights reserved.
This email is designed and developed by PR4Lawyers.
Facebook Twitter LinkedIn Google+ Youtube AGMB, LLP Website Neil Garfinkel Michael Barone Neil Garfinkel E-Mail Michael Barone E-Mail Marie O' Brien Marie O'Brien E-Mail