Multistate MSB Licensing Agreement Update

Exam Type	Rating	Number of Licensees
File Reviews	1	0
File Reviews	2	7
File Reviews	3	3
File Reviews	4	1
File Reviews	n/a	5

During the fourth quarter of 2018, the residential mortgage loan servicing team conducted 16 examinations. Two exams were conducted onsite, the remainder were offsite. Overall, the trend is more “2” and “4” rated exams and fewer “1” rated exams than the previous quarter. The previous quarter featured seven “1” rated exams. There were no “4” rated exams last quarter.

The most common violation was failure to file an accurate Consolidated Annual Report with the Department. It will soon be time to file Consolidated Annual Reports for the 2018 calendar year. The Department asks loan servicing companies to report the total count and unpaid principal balance of loans serviced on January 1, 2018, plus the count and principal balance (at boarding) of all new servicing accounts boarded in 2018. Many companies have been reporting the count and unpaid balance of their servicing portfolio as of December 31st. This is incorrect. Reporting a static portfolio as of December 31st does not capture all of the servicing activity a company has engaged in during the year.

Additionally, many companies do not report the type of servicing correctly. The Department asks for company activity in three categories: 1) Whole loans or MSRs serviced directly, 2) Whole loans or MSRs contracted to a subservicer, and 3) Whole loans or MSRs subserviced for another entity. When a company uses subservicing, they should report the company (ies) that subservice for them. The Department will not charge an annual assessment twice on a loan that is subserviced by one of our licensees. It will be charged to the entity doing the subservicing, not to the master servicer. Unlike previous years, servicing assessments will not be billed separately from lending assessments. Both will be calculated and charged when you file your reports through the online system.

Please pay close attention to the instructions in the servicing section of the Consolidated Annual Report this year. If you have questions contact the Department for help.