NC Servicing Law: Unprecedented Requirements.

Byline: Amilda Dymi

Raleigh, NC-North Carolina House Bill 2463, designed "to regulate mortgage servicing, to require mortgage servicer licensure under the Mortgage Lending Act, and to make technical and clarifying changes to the Mortgage Lending Act," becomes effective Jan. 1, 2009.

Passed into law on Aug. 1, the legislation is already getting mixed reviews.

According to privately held field services provider Safeguard Properties, Cleveland, the new law contains "extensive licensing requirements" for mortgage servicers and "imposes unprecedented requirements and prohibitions on foreclosure-related conduct."

The legislation broadens the definition of "mortgage servicer" when compared to the existing RESPA description, Safeguard said. (Since 1990, Safeguard operates nationally through a network of subcontractors that perform superintendence, preservation, maintenance and ancillary services.)

A servicer is defined as a person who directly or indirectly "acts as a mortgage servicer," meaning someone who engages, whether for another or on its own behalf, "in the business of receiving any scheduled periodic payments from a borrower pursuant to a mortgage loan." This includes receiving escrow amounts, and making payments of principal and interest and other payments received from the borrower pursuant to the mortgage documents or the servicing contract.

Servicer reporting requirements pertaining to the number of loans serviced, type and characteristics of the loans, also include reporting the number of loans in default broken down by 30-, 60- and 90-day ...