New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter III - SUPERINTENDENT'S REGULATIONS › Subchapter B - NON-BANKING ORGANIZATIONS › Part 419 - SERVICING MORTGAGE LOANS: BUSINESS CONDUCT RULES › Section 419.11 - Oversight of third-party providers

Current through Register Vol. 46, No. 28, July 10, 2024
A servicer shall adopt and maintain policies and procedures
					 to oversee and manage third-party providers, including:
(a) A servicer shall perform appropriate due
				  diligence of third-party providers' qualifications, expertise, capacity,
				  reputation, complaints, information systems, document custody practices,
				  quality assurance plans, financial viability, and compliance with licensing
				  requirements and applicable rules and regulations.
(b) A servicer shall require third-party
				  providers to comply with a servicer's applicable policies and procedures and
				  applicable New York and Federal laws and rules.
(c) A servicer utilizing third-party
				  providers shall remain responsible for all actions taken by the third-party
				  providers.
(d) A servicer shall
				  clearly and conspicuously disclose to borrowers if it utilizes a third-party
				  provider and shall clearly and conspicuously disclose to borrowers that the
				  servicer remains responsible for all actions taken by third-party
				  providers.
(e) A servicer shall
				  conduct periodic reviews, not less than annually, of each third-party provider
				  the servicer retains. The review shall be conducted by servicer employees who
				  are separate and independent of employees who prepare foreclosure or bankruptcy
				  affidavits, sworn documents, declarations, or other foreclosure or bankruptcy
				  documents. The review shall include:
(1) a
				  review of a sample of the foreclosure and bankruptcy documents prepared by the
				  third-party provider for compliance with applicable New York and Federal laws
				  and rules and the accuracy of the facts contained in such documents;
(2) a review of the fees and costs assessed
				  by the third-party provider to provide that only fees and costs that are
				  lawful, reasonable, and actually incurred are charged to borrowers and that no
				  portion of any fees or charges incurred by any third-party provider for
				  technology usage, connectivity, or electronic invoice submission is charged as
				  a cost to the borrower;
(3) a
				  review of the third-party provider's processes to provide for compliance with
				  the servicer's policies and procedures;
(4) a review of the security of original loan
				  documents maintained by the third-party provider;
(5) a review of customer complaints
				  concerning third-party providers; and
(6) a requirement that the third-party
				  provider disclose to the servicer:
(i) any
				  instance where any party requests the imposition of sanctions or that
				  professional disciplinary action be taken against the third-party provider for
				  misconduct related to the services the third-party provider provides to the
				  servicer; and
(ii) any imposition
				  of sanctions or professional disciplinary action taken against the third-party
				  provider for misconduct related to the services the third-party provider
				  provides to the servicer.