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 419.3 - Crediting of payments

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
In general.
All mortgage loan payments received by a servicer at the
					 address where the borrower has been instructed in writing to make payments
					 shall be credited, or treated as credited, on the business day received, to the
					 extent that the borrower has provided sufficient information to credit the
					 account. For all mortgage loans originated after January 1, 2011, except when
					 inconsistent with Federal law or regulation or as provided in subdivision (d)
					 of this section, such payments shall be credited by the servicer to the
					 interest and principal due on the home loan before crediting the payments to
					 taxes, insurance, or fees.
(b)
Reasonable payment
				  requirements.
Requirements imposed by a servicer for making payments must
					 be reasonable. A cut-off time at the end of the business day for receipt of a
					 mailed check at the location specified by the servicer for receipt of such
					 check is deemed to be reasonable.
(c)
Non-conforming payments.
If a borrower fails to comply with a servicer's reasonable
					 payments requirements that have been provided to the borrower in writing, the
					 servicer shall credit any payment accepted by the servicer as soon as
					 commercially practicable, but in no event later than 5 days after
					 receipt.
(d)
Late
				  payments.
Late payments must be credited to interest, principal,
					 taxes, insurance and other fees before any late fee is collected.
(e)
Scheduled method of
				  accounting.
If a servicer uses the scheduled method of accounting, any
					 regularly scheduled payment made prior to the scheduled due date shall be
					 credited no later than the due date or 30 days from the date of receipt,
					 whichever is earlier.
(f)
Notice of noncredit.
If a servicer receives any payment on a mortgage loan and
					 does not credit it or treat it as credited by the due date or within 30 days
					 from the date of receipt, whichever is earlier, the servicer shall, within 10
					 business days of receipt, send the borrower notice by mail to the borrower's
					 last known address indicating the reason the payment was not credited or
					 treated as credited to the account, and any actions the borrower needs to take
					 to make the loan current. Such notice may instead be sent electronically in
					 accordance with the requirements of article III of the Technology Law, if the
					 borrower has previously opted for paperless billing.
(g)
Payment overages and
				  shortages.
A servicer shall establish written policies and procedures
					 for payment overages and shortages, including unapplied funds and payments held
					 in suspense accounts. If a servicer retains a partial payment in a suspense or
					 unapplied funds account, the servicer shall, on accumulation of sufficient
					 funds in any suspense or unapplied funds account to cover a periodic payment,
					 treat such funds as a periodic payment and credit the periodic payment to the
					 borrower's loan.
(h) A
				  servicer shall not apply funds from a suspense or unapplied funds account to
				  pay fees until all unpaid principal, interest, and escrow amounts (if
				  available) are paid and brought current or the loan is discharged or
				  foreclosed.