Mortgage servicers will be subject to new rules tomorrow on mortgages with borrowers who have filed bankruptcy.
Changes to the Federal Rules of Bankruptcy Procedure are scheduled to go into effect on Dec. 1. The rules change the policies and procedures for servicing loans in bankruptcy. They are also expected to enhance transparency in the process.
LoanServ has been updated to ensure that servicers maintain compliance with the new rules, according to an announcement Wednesday from the developer of the servicing technology, Fiserv.
“The Federal Rules of Bankruptcy Procedure changes govern the filing of proofs of claim and notice issues related to payment changes, post-petition fees and other accuracy checks to actions and data of the servicer,” the statement said. “For instance, the new proof of claim form requires the servicer to attach a statement itemizing interest, fees, expenses and charges included in the claim along with the amount to cure the default and an escrow account statement prepared as of the date of the petition.”
Fiserv said it evaluated its system’s capabilities to account for items such as proof-of-claim shortages, payment changes and escrow disbursements made before the effective date chosen by each client. It also evaluated the system’s ability to account for the date that fees, expenses and charges are incurred.
Joe Dombrowski, mortgage strategist for the Mortgage Daily advertiser, explained in the news release that the Brookfield, Wis., company has already taken steps to educate its clients and help them adapt to the changes.
Fiserv clients reportedly include small mortgage servicers as well as top-five servicers.
