Compliance Question of the Week 2017
Other than the paying off of the mortgage loan, when a Short Year Escrow Statement is required, off-cycle escrow analyses are not required.
However, in the following situations, it is strongly advisable:
- When a scheduled escrow disbursement has increased or decreased greater than a predetermined amount. This could be based upon a fixed dollar amount or percentage, determined by each company,
- When the Disbursement Date of an escrowed item is changed,
- The addition or removal of an escrow line, or
- The change in the maximum allowable escrow cushion.
Yes. Chapter 3201.1 of Freddie Mac’s Single Family Seller/Servicer Guide (the “Guide”) addresses Fraud Prevention and Detection. It indicates, in relevant part, that Sellers/Servicers must train employees, and certain non-employees, who are in a position to notice and report fraud or suspected fraud at least annually to ensure that these employees are aware of emerging fraud scenarios. Such individuals must be trained in all applicable areas of the Seller’s/Servicer’s mortgage business with regard to:
(1) Common and emerging fraud schemes; and
(2) Red flags that may signal fraud and the need for further review.
Non-employees who may require fraud prevention and detection training include, but are not necessarily limited to, contract underwriters and processors, contract quality control firms, borrower outreach companies, loss mitigation providers and collection companies. Trainings may be conducted by the Seller/Servicer or by a qualified third party. Alternatively, the Guide permits Sellers/Servicers to meet the training requirements by obtaining annual written verifications from the individuals requiring training. Verifications must confirm that training has been received from a third party and meets the requirements of the Guide.
15 U.S. Code § 1639(d)(2) indicates that the maximum penalty for a loan originator’s violation of the Loan Originator Compensation Rule is the greater of the actual damages sustained or three times the total compensation earned on the subject transactions; plus associated costs, such as reasonable attorney’s fees. Noteworthy, personal liability may attach to the mortgage loan originator even if there are no actual damages sustained by a consumer.