As previously announced, the Georgia Department of Banking and Finance finalized new regulations affecting a wide range of financial institution activities (see https://compliance.docutech.com/2018/06/28/compliance-news-georgia-dept-of-banking-and-finance-finalize-new-regulations/). This includes new Ga. Comp. R. & Regs. 80-11-6-.02(5)(b) & (d), which require a notice concerning the transfer of servicing, which is to be provided upon the transfer of servicing of a “closed-end mortgage loan” or at the closing settlement.
This requirement is met by providing our “Notice of Transfer of Servicing” (Cx17905), which is based on the notice of the same title promulgated under Federal Regulation X (see 12 CFR Pt. 1024, App. MS-2). However, because there are some loans which are covered under Georgia-law which are not covered under Regulation X (including the latter’s preemption of state law; see 12 CFR §§ 1024.2, 1024.5[b], 1024.31, & 1024.33[d]) and because Georgia’s new requirements have nuances with Regulation X, we will be taking a conservative approach and will be making the following edits to the Georgia-version of Cx17905, to ensure compliance with both Federal and State laws:
- Adding a paragraph before our optional insurance paragraphs which will state: “This transfer of servicing does not affect any term or condition of your mortgage loan, other than terms directly related to the servicing of the loan.”
- Configuring the optional insurance paragraphs to print in all cases, rather than just when optional insurance coverage exists.
- Modifying the fields used for the optional insurance (“Transfer of Servicing Affect on Option Insurance” [FI 41996] and “Transfer of Servicing Action to Maintain Option Insurance Coverage” [FI 41997]) so that they will print “NO EFFECT” (FI 41996) or “N/A” (FI 41997) when the respective fields do not have a value.
These changes will take effect on July 6, 2018. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.