3170-0027 SS for 3170-AA49 (NPRM) Reg X Final

CONSUMER FINANCIAL PROTECTION BUREAU
INFORMATION COLLECTION REQUEST—SUPPORTING STATEMENT
REAL ESTATE SETTLEMENT PROCEDURES ACT (REGULATION X)
12 CFR 1024
(OMB CONTROL NUMBER: 3170-0027)

OMB TERMS OF CLEARANCE:
When the Office of Management and Budget (OMB) last reviewed the information
collections inventoried under OMB control number 3170-0027, no terms of clearance were
provided (see OMB Notice of Action dated 04/26/2013).

ABSTRACT: The Bureau of Consumer Financial Protection (the Bureau) is proposing to amend
Regulation X, which implements the Real Estate Settlement Procedures Act of 1974 (RESPA)
and the official interpretation of the regulation. The proposed amendments amend and clarify
several existing servicer obligations, including the obligation to attempt to establish contact with
and provide written disclosures to delinquent borrowers, as defined under a new proposed
definition of delinquency; to provide disclosures regarding the identity of a mortgage’s owner or
assignee, and regarding the status of a borrower’s hazard insurance coverage; to set a date by
which borrowers must return documents to complete their loss mitigation applications; to take
affirmative steps to protect borrowers from wrongful foreclosure; and to complete evaluations of
loss mitigation application submitted immediately prior to a servicing transfer. The Bureau is
also proposing several new servicer obligations, including the obligation to respond to
information and loss mitigation requests from a borrower’s successors in interest; to provide
written early intervention disclosures to borrowers in bankruptcy or who have invoked their
cease communication rights under the Fair Debt Collection Practices Act; to provide borrowers
who apply for loss mitigation with notices that their applications are complete; to exercise
reasonable diligence when attempting to obtain loss mitigation information from third parties;
and to evaluate multiple loss mitigation applications from the same borrower where that
borrower was able to bring his or her loan current since the last application.
The Consumer Financial Protection Bureau (Bureau) is dividing proposed rules to amend
the Bureau’s Regulations X and Z into separate Information Collection Requests (ICRs) in
OMB’s system (accessible at www.reginfo.gov) to ease the public’s ability to view and
understand the individual proposed rules for Regulation X and Regulation Z. Respondents
should continue to use the 3170-0016 control number for Regulation X and the 3170-0015
control number for Regulation Z.
PART A. JUSTIFICATION
1. Circumstances Necessitating the Data Collection
Certain disclosures are required by the Real Estate Settlement Procedures Act (RESPA)
of 1974, as amended by Section 461 of the Housing and Urban-Rural Recovery Act of 1983

(HURRA), and other various amendments. The statute is found at 12 U.S.C. 2601 et seq. The
implementing regulations historically were published by the Department of Housing and Urban
Development (HUD) at 24 CFR 3500. In light of the transfer of HUD’s rulemaking authority for
RESPA to the Bureau, the Bureau adopted an interim final rule (Interim Final Rule) recodifying
HUD’s Regulation X at 12 CFR 1024 to reflect the transfer of authority to the Bureau and certain
other changes made by the Dodd-Frank Act.
The Dodd-Frank Act amended RESPA and the Truth in Lending Act (TILA) by, among
other things, mandating new mortgage servicing disclosures and procedures to improve
protections for consumers with certain residential mortgages. 12 U.S.C. 2601 et seq.; 15 U.S.C.
1638a, 1638(f), 1639f, and 1639g. Through a final rule issued on January 17, 2013 (the 2013
RESPA Mortgage Servicing Final Rule), the Bureau revised Regulation X to add a number of
mortgage servicing requirements provided for in the Dodd-Frank Act’s amendments to RESPA,
as well as other requirements the Bureau adopted pursuant to its authority under RESPA and the
Dodd-Frank Act. Section 1463 of the Dodd-Frank Act creates statutory mandates under new
subsections (k), (l) and (m) of RESPA section 6. Section 1463 of the Dodd-Frank Act also
amends certain consumer protection provisions set forth in section 6(e) through (g) of RESPA.
Several of these requirements involve information collections.
Since January 10, 2014, the effective date of the Mortgage Servicing Rules, the Bureau
has continued to engage in ongoing outreach and monitoring with consumer advocacy groups,
industry representatives, housing counselors, and other stakeholders. As a result, the Bureau has
identified further issues. On November 20, 2014, the Bureau issued a proposed rule that
provides several amendments to the Mortgage Servicing Rules to revise regulatory provisions
and official interpretations relating to the Regulation X and Z mortgage servicing rules. The
proposed amendments to Regulation X include a proposal to apply all of the Mortgage Servicing
Rules to successors in interest once a servicer confirms the successor in interest’s identity and
ownership interest in the property, as well as rules relating to how a mortgage servicer confirms
a successor in interest’s status; a proposal to add a general definition of delinquency that would
apply to all of the servicing provisions of Regulation X; proposed revisions to how a servicer
responds to requests for information asking for loan ownership information; amendments to the
required force-placed insurance disclosures to account for when a borrower has insufficient,
rather than expiring or expired, hazard insurance coverage; proposed clarifications to the early
intervention live contact obligations and written early intervention notice obligations; proposals
to require servicers to provide written early intervention notices to certain borrowers who are in
bankruptcy or who have invoked their cease communication rights under the Federal Debt
Collection Practices Act (FDCPA).
In addition, the Bureau proposed several amendments to the loss mitigation requirements
in § 1024.41, including a proposal to require servicers to meet the loss mitigation requirements
more than once in the life of a loan for borrowers who become current after a delinquency; a
proposal to modify the existing exception to the 120-day prohibition on foreclosure filing to
allow a servicer to join the foreclosure action of a senior lienholder; a proposal to clarify that
servicers have significant flexibility in setting a reasonable date by which a borrower must return
documents and information to complete an application, so long as such date maximizes borrower
protections; a proposal to clarify that servicers must take affirmative steps to delay a foreclosure
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sale, and that a servicer who has not taken, or caused counsel to take, all reasonable affirmative
steps to delay the sale, is required to dismiss the foreclosure action if necessary to avoid the sale;
a proposal to require that servicers promptly send a written notice containing certain prescribed
content once they receive a complete loss mitigation application; a proposal to address how
servicers obtain information not in the borrower’s control and evaluate a loss mitigation
application while waiting for such third party information; a proposal to permit servicers to offer
a short-term repayment plan based upon an evaluation of an incomplete application; a proposal
to clarify that servicers may stop collecting loss mitigation information from a borrower after
receiving information confirming that the borrower is ineligible for a specific loss mitigation
option; and a proposal to clarify how loss mitigation procedures and timelines apply to a
transferred mortgage loan for which there is a loss mitigation application pending at the time of a
servicing transfer.
Of the above proposed amendments, the following six proposed requirements involve
information collections or changes to existing information collection requirements in Regulation
X:
Successors in interest. That servicers communicate with potential successors in interest
about their requirements for confirming a successor in interest’s identity and interest in the
property and that servicers treat successors in interest as borrowers for purposes of Regulation
X’s mortgage servicing rules.
Force-placed insurance notices. Minor changes to force-placed insurance notices to
address the circumstance in which a borrower’s hazard insurance coverage is insufficient (rather
than expired) and to permit the consumer’s account number to be included on the notice.
Early intervention written notices to borrowers in bankruptcy or protected by FDCPA. That
servicers provide early intervention written notices to borrowers in bankruptcy and to borrowers
who have provided the servicer with a cease communications notice under the FDCPA.
Notice of complete application. That servicers provide a notice to borrowers when a loss
mitigation application is complete.
Third-party information. That servicers provide a notice to borrowers if their
determination with respect to a loss mitigation application is delayed beyond a date that is 30
days after receipt of a complete loss mitigation application because information from third
parties required to evaluate the application has not been submitted.
Multiple loss mitigation evaluations. That servicers comply with the loss mitigation
provisions of RESPA with respect to multiple loss mitigation applications from the same
borrower over the life of the loan. Servicers that offer loss mitigation options in the ordinary
course of business are required to follow certain procedures when evaluating loss mitigation
applications, including (1) providing a notice telling the borrower if the loss mitigation
application is incomplete, approved, or denied (and, for denials of loan modification requests, a
more detailed notice of the specific reason for denial and appeal rights), (2) providing a notice of
the appeal determination, and (3) providing servicers of senior or second liens encumbering the
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property that is the subject of the loss mitigation application copies of the loss mitigation
application.
2. Use of the Information
The third party disclosures in this collection are required by statute and regulations.
Borrowers use the disclosures required by RESPA and Regulation X to facilitate their informed
use of credit terms as well as to protect themselves against inaccurate and unfair credit billing
practices. Disclosures are not submitted to the federal government.
The Bureau is proposing to expand the scope of servicers’ obligation to provide certain
disclosures, including:
Successors in interest. Requiring servicers to treat successors in interest as borrowers for
purposes of Regulation X’s mortgage servicing rules (including with respect to the provision of
any disclosures servicers are currently required to provide to borrowers).
Early intervention written notices to borrowers in bankruptcy or protected by the
FDCPA. Requiring servicers to provide early intervention written notices to borrowers in
bankruptcy and to borrowers who have provided the servicer with a cease communications
notice under the FDCPA.
Multiple loss mitigation evaluations. Requiring that servicers comply with the loss
mitigation provisions of RESPA with respect to multiple loss mitigation applications from the
same borrower, including by providing a notice telling the borrower if the loss mitigation
application is incomplete, approved, or denied; providing a notice of an appeal determination;
and providing servicers of senior or second liens encumbering the property that is the subject of
the loss mitigation application copies of the loss mitigation application.
In addition, the Bureau is proposing to adopt minor changes to force-placed insurance
notices to address the circumstance in which a borrower’s hazard insurance coverage is
insufficient (rather than expired) and permit the consumer’s account number to be included on
the notice.
The following information collections would be new requirements under the Bureau’s
proposal:
Successors in interest. The proposed requirement that servicers communicate with
potential successors in interest about the servicer’s requirements for confirming a successor in
interest’s identity and interest in the property.
Notice of complete application. The proposed requirement that servicers provide a notice
to borrowers when a loss mitigation application is complete.
Third-party information. The proposed requirement that servicers provide a notice to
borrowers if their determination with respect to a loss mitigation application is delayed beyond a
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date that is 30 days after receipt of a complete loss mitigation application because information
from third parties required to evaluate the application has not been submitted.
3. Use of Information Technology
The required disclosures may be provided in electronic form, subject to compliance with
the consumer consent and other applicable provisions of the E-Sign Act Section 101(d)
4. Efforts to Identify Duplication
The early intervention and loss mitigation procedures in the proposed rule may overlap
with existing Federal law. The Bureau is issuing minimum standards so that, to the extent
requirements proposed by Bureau overlap with existing Federal law, the Bureau expects
servicers would abide by the stricter standard in order to comply with all requirements. Further,
to the extent a contact required by the Bureau’s early intervention requirements conflict with
other Federal law, the Bureau has included a provision that states that the Bureau’s early
intervention requirements do not require a servicer to communicate with a borrower in a manner
otherwise prohibited by applicable law. For borrowers that have specifically invoked the
FDCPA’s cease communication protections, the Bureau is proposing to provide servicers a safe
harbor from liability under the FDCPA for compliance with the requirement to provide the
written early intervention notice.
Apart from this overlap, the Bureau is not aware of any other Federal law or regulations
that currently duplicate, overlap, or conflict with the proposals under consideration.
5. Efforts to Minimize Burdens on Small Entities
Under the proposed rule, the Bureau estimates that approximately 87 percent of
respondents are small entities. Servicers that service 5,000 mortgage loans or less, all of which
the servicer or an affiliate owns or originates, are exempt from most of the requirements of
§§ 1024.37 through 1024.41. As such, small servicers are generally exempt from the proposals
necessitating data collection.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
This information is not submitted to the federal government. These third-party
disclosures are required by statute, 12 U.S.C. 2601 et seq., and regulations. The burdens on
respondents are the minimum necessary to ensure that (i) successors in interest do not
unnecessarily enter foreclosure, (ii) borrowers receive accurate information about any forceplaced insurance policies servicers may obtain on their propoerty, (iii) borrowers who are in
bankruptcy or who have excercised their cease communication rights under the FDCPA receive
necessary information, (iv) borrowers know the status of their loss mitigation application, and (v)
borrowers who previously applied for a loss mitigation option have another opportunity to be
evaluated for loss mitigation if they bring their loan current.
The burdens on respondents are also necessary to ensure that servicers have a reasonable
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basis for undertaking actions that may harm borrowers and that servicers satisfy their duties to
borrowers with respect to servicing federally related mortgage loans.
7. Circumstances Requiring Special Information Collection
There are no special circumstances. The collection of information is conducted in a
manner consistent with the guidelines in 5 CFR 1320. 5(d)(2).
8. Consultation Outside the Agency
In accordance with 5 CFR 1320.11, the Bureau has published a notice of proposed
rulemaking in the Federal Register inviting the public to comment on the information collection
requirements contained in the proposed rule. Comments received in response to the notice of
proposed rulemaking will be addressed in the preamble to the final rule.
Prior to issuing the proposed rule, the Bureau consulted with HUD and other Federal
agencies consistent with section 1022 of the Dodd-Frank Act. In developing the proposed rule,
the Bureau has considered the proposed rule’s potential benefits, costs, and impacts. 1
The proposal sets forth a preliminary analysis of these effects, and the Bureau requested
comments on this topic. In addition, the Bureau has consulted, or offered to consult, with the
prudential regulators, HUD, FHFA, the Federal Trade Commission, and the Federal Emergency
Management Agency, including regarding consistency with any prudential, market, or systemic
objectives administered by such agencies. The Bureau also held discussions with and solicited
feedback from the United States Department of Agriculture Rural Housing Service, the Federal
Housing Administration, Ginnie Mae, and the Department of Veterans Affairs regarding the
potential impacts of the proposed rule on those entities’ mortgage loan insurance or
securitization programs. The Bureau also consulted with other stakeholders, including
roundtables with industry representatives and consumer advocacy groups.
9. Payments or Gifts to Respondents
Not applicable.
10. Assurances of Confidentiality
There are no assurances of confidentiality provided to respondents.
11. Justification for Sensitive Questions

1

Specifically, section 1022(b)(2)(A) of the Dodd-Frank Act calls for the Bureau to consider the potential benefits
and costs of a regulation to consumers and covered persons, including the potential reduction of access by
consumers to consumer financial products or services; the impact on depository institutions and credit unions with
$10 billion or less in total assets as described in section 1026 of the Dodd-Frank Act; and the impact on consumers
in rural areas.

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There is no information of a sensitive nature being requested.
12. Estimated Burden of Information Collection
The existing burden for the information collection is as follows
Respondents
Ongoing:
Notice of Mortgage Service Transfer
Force-Placed Insurance
Error Resolution & Response to Inquiries
Early intervention
Loss Mitigation
Total

Disclosures Per
Respondent

Hours burden
per disclosure

Total burden
hours

12,642
12,642
12,642
1,023
1,023

735
86
45
31
5,474

0.003
0.003
0.170
0.253
0.170

27,861
3,261
97,187
7,975
949,847

12,642

1,311

0.066

1,086,131 2

The estimated new one-time and ongoing costs attributed to the information collections in
the proposed rules are listed below.
Disclosures
per
Respondent

Respondents
Ongoing
Successors in Interest—Regulation X
Force-Placed Insurance
Early Intervention Written Notices
Notice of Complete Loss Mitigation
Application
Third-Party Information
Loss Mitigation—Subsequent Applications
Total
One-Time
Successors in Interest—Regulation X
Force-Placed Insurance
Early Intervention Written Notices
Notice of Complete Loss Mitigation
Application
Third-Party Information
Loss Mitigation—Subsequent Applications
Total

Hours Burden
per Disclosure

Total Burden
Hours

12,711
12,711
502

6
0
1,487

0.013
0
0.003

1,086
0
2,239

502

0

0

0

502
502

52
837

0.003
0.144

67
60,571

12,711

100

0.050

63,963

12,711
12,711
502

1
1
1

4.7
0.269
1.695

59,742
3,418
851

502

1

2.640

1,326

502
502

1
1

2.690
0.578

1,351
290

12,711

66,978

Under the proposal, the Bureau would account for the paperwork burden for all
respondents under Regulation X. For purposes of this PRA analysis, the Bureau estimates that
there are 11,323 depository institutions and credit unions subject to the final rule, and an
additional 1,388 nondepository institutions. Therefore, the total number of respondents is
12,711.
The Bureau calculates labor costs by applying appropriate hourly cost figures to the
burden hours described below. The hourly rates for lawyers and software developers are based
upon the Bureau of Labor Statistics’ national mean hourly wage estimates by occupational
2

The current OMB inventory is 1,115,115 hours. The variances results from rounding in the database used for the
economic analysis.

7

employment. The estimate for customer service agents reflects reports to the Bureau by market
participants. To obtain fully-loaded hourly rates, the Bureau divides hourly wages by 67.5%.
The fully-loaded hourly labor cost by occupation is given below.
In-house Costs Estimates
Occupation
Customer Service Agents
Lawyers
Software developer
Compliance officer

Hourly Costs to Institutions
$19
$93
$74
$47

Most servicers rely upon vendor servicing systems because the use of vendors
substantially mitigates the cost of revising software and compliance systems as the efforts of a
single vendor can address the needs of a large number of servicers. Based on discussions with a
leading servicer technology provider, the CFPB believes that updates necessitated by new
regulations would likely be included in regular annual updates for larger and medium sized
institutions. These costs would not be passed on to the client servicers. Based on information
provided by small entity representatives that participated in the Small Business Review Panel
process for the 2013 RESPA Servicing Final Rule, the Bureau estimates that vendors that work
with smaller servicers will pass along the costs of any system upgrades.
Although most servicers rely on software and compliance systems provided by outside
vendors, a small number of large entities maintain their own servicing platforms and will require
software and information technology updates. The Bureau estimates that one large depository
respondent and 29 large nondepository respondents operate in-house servicing platforms.
Based upon industry research, the Bureau applied a consistent methodology to estimate
the ongoing costs incurred by large and small servicers. All respondents will have ongoing
production and distribution costs from providing new or pre-existing modified disclosures.
Production costs include deriving the information needed for disclosure, while distribution costs
consist of printing and mailing. The Bureau believes that most large servicers (both depository
and nondepository) employ vendors for the printing and distribution of their disclosures. Based
upon talks with large servicers, the Bureau estimates the per response distribution cost for large
servicers is approximately 30 cents. On the other hand, production costs are more likely to be
handled internally at large servicers, which the Bureau estimates takes 0.003 hours of internal
labor to produce.
A. Successors in Interest
Under the Bureau’s proposal, servicers would be required (1) to respond to a written
request from a person that indicates that the person may be a successor in interest by providing
that person with information regarding what documents the servicer requires to confirm the
person’s identity and ownership interest in the property and (2) to have policies and procedures
to ensure that the servicer can provide promptly upon request a description of what documents
the servicer reasonably requires to confirm the person’s identity and ownership interest in the
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property, provide promptly that information to the person, and, upon the receipt of such
documents, notify the person promptly, as applicable, that the servicer has confirmed the
person’s status, has determined that additional documents are required (and what those
documents are), or has determined that the person is not a successor in interest. Servicers would
also be subject to Regulation X’s requirements, including loss mitigation requirements, with
respect to successors in interest.
i.

One-time burden

The Bureau estimates that, for each covered person, one lawyer and one compliance
officer would take 0.1 hours each to read and review the sections of the rule that describe the
successors in interest provision, based on the length of the sections. The burden allocated to the
Bureau respondents is therefore 0.1*2*12,711=2,542 hours.
Certain respondents will have one-time burden in hours from training personnel in
compliance with the proposed requirement. The Bureau estimates that there are 52,000 customer
service agents that will require training, that each customer service agent will require one hour of
training to comply with the proposed disclosure requirements, and that the ratio of trainers to
customer service agents is one to ten. The aggregate one-time burden associated with training is
therefore 1.1*52,000=57,200.
ii.

Ongoing burden

Based on discussions with servicers and its knowledge of the industry, the Bureau
estimates that each year the number of successors in interest covered by the rule is 0.1% of all
mortgage loans covered by Regulation Z. The Bureau has previously estimated that the annual
burden of complying with the servicing rules in Regulation X is 1,086,000 hours. Because the
successors in interest proposal would increase this burden by 0.1%, the estimated annual burden
of the successors in interest proposal is 0.001*1,086,000=1,086 hours.

Successors in Interest
Bureau share of respondents
Bureau share of responses
Average frequency per respondent
Annual Burden (hrs):
Time per response (hours)
Total (hours)

12,711
76,266
6

1,086
0.013

B. Changes to Force-Placed Insurance Disclosures
The proposed rule makes minor changes to the content of required force-placed insurance
notices, which are required before a servicer may charge a borrower for force-placed insurance.

9

i.

One-time burden

The Bureau estimates that, for each covered person, one lawyer and one compliance
officer would take 0.13 hours each to read and review the sections of the rule that describe the
force-placed insurance provision, based on the length of the sections. The burden allocated to
the Bureau respondents is therefore 0.13*2*12,711=3,178 hours.
Covered persons that maintain their own software and compliance systems would incur
one-time costs to adapt their software and compliance systems to produce the new forms. The
Bureau estimates that the 30 institutions with their own servicing platforms will each require 8
hours to update their systems. Therefore, the aggregate one-time hourly burden from software
and information technology updates is 30*8=240 hours. The Bureau also estimates that small
servicers will incur vendor costs of $72 each in connection with the change to the force-placed
insurance disclosures.
ii.

Ongoing burden

Because the content of the required notices would not change substantially under the
proposed rule and the circumstances under which the disclosures are required would not change,
there would not be an ongoing burden under the proposed rule.
Changes to Force-Placed Insurance Disclosures
Bureau share of respondents
Bureau share of responses
Average frequency per respondent
Annual Burden (hrs):
Time per response (hours)
Total (hours)

12,711
0
0

0
0

C. Early Intervention Written Notices
The proposed rule requires that servicers send written early intervention notices to
borrowers in bankruptcy and borrowers who have exercised their cease communication rights
under the FDCPA. For borrowers in bankruptcy, the servicer would be required to send the same
early intervention notice that is required to be sent to other borrowers. However, for notices sent
to borrowers who have exercised their FDCPA cease communication rights, the notices would be
subject to certain additional requirements. Note that borrowers have rights under the FDCPA
only with respect to accounts that were delinquent at the time the servicer acquired the servicing
rights. Therefore, servicers that do not acquire servicing rights in the course of their business
would not be subject to the rule’s requirements.
i.

One-time burden

The Bureau estimates that, for each covered person, one lawyer and one compliance
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officer would take 0.25 hours each to read and review the sections of the rule that describe the
early intervention written notice provision, based on the length of the sections. The burden
allocated to the Bureau respondents is therefore 0.25*2*502=251 hours.
Covered persons that maintain their own software and compliance systems would incur
one-time costs to adapt their software and compliance systems to produce the new forms. The
Bureau estimates that the 30 institutions with their own servicing platforms will each require 20
hours to update their systems. Therefore, the aggregate one-time hourly burden from software
and information technology updates is 30*20=600 hours.
ii.

Ongoing burden

Respondents will have ongoing production and distribution costs from providing the new
disclosure. The Bureau estimates the annual number of early intervention notices that would be
sent to borrowers who are in bankruptcy or who have exercised their cease communication rights
under the FDCPA to be 746,300. The Bureau estimates that large servicers will incur internal
production costs of approximately 0.003 hours per disclosure, multiplied by 746,300 disclosures,
resulting in 2,239 burden hours. Large servicers will also incur distribution costs of $0.30 per
response from their print vendors for the distribution of the periodic statements, for an annual
aggregate cost of $224,000.
Early Intervention Written Notices
Bureau share of respondents
Bureau share of responses
Average frequency per respondent
Annual Burden (hrs):
Time per response (hours)
Total (hours)

502
746,300
1,487

0.003
2,239

D. Notice of Complete Loss Mitigation Application
The Bureau’s proposal requires a servicer to provide a written notice to a borrower
promptly upon receiving the borrower’s complete application. The Bureau understands that the
practice of providing borrowers with a written notice informing them that their loss mitigation
application is complete is a common business practice (i.e., a “usual and customary” business
practice) today for most mortgage servicers. However, the Bureau understands that the specific
content of the proposed notices may not reflect common practices.
i.

One-time burden

The Bureau estimates that, for each covered person, one lawyer and one compliance
officer would take 0.13 hours each to read and review the sections of the rule that describe the
early intervention written notice provision, based on the length of the sections. The burden
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allocated to the Bureau respondents is therefore 0.13*2*502=126 hours.
Covered persons that maintain their own software and compliance systems would incur
one-time costs to adapt their software and compliance systems to produce the new forms. The
Bureau estimates that the 30 institutions with their own servicing platforms will each require 40
hours to update their systems. Therefore, the aggregate one-time hourly burden from software
and information technology updates is 30*40=1,200 hours.
ii.

Ongoing burden

The Bureau believes that the majority of covered mortgage servicers currently send a
written notice to borrowers notifying them that their loss mitigation application is complete,
meaning that the provision of such written notices is usual and customary for covered mortgage
servicers. Therefore, while the proposed rule would likely change the content of such required
disclosures and therefore impose one-time costs, there would be no ongoing costs associated
with the proposal.
Notice of Complete Loss Mitigation Application
Bureau share of respondents
Bureau share of responses
Average frequency per respondent
Annual Burden (hrs):
Time per response (hours)
Total (hours)

502
0
0

0
0

E. Notice Regarding Outstanding Third-Party Information
The proposed rule requires written notice to borrowers if, thirty days following
submission of a complete loss mitigation application, the servicer has not received information
from a party other than the servicer or the borrower and is necessary to evaluate the application.
i.

One-time burden

The Bureau estimates that, for each covered person, one lawyer and one compliance
officer would take 0.15 hours each to read and review the sections of the rule that describe the
third-party information provision, based on the length of the sections. The burden allocated to
the Bureau respondents is therefore 0.15*2*502=1,351 hours.
Covered persons that maintain their own software and compliance systems would incur
one-time costs to adapt their software and compliance systems to produce the new forms. The
Bureau estimates that the 30 institutions with their own servicing platforms will each require 40
hours to update their systems. Therefore, the aggregate one-time hourly burden from software
and information technology updates is 30*40=1,200 hours.

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ii.

Ongoing burden

Respondents will have ongoing production and distribution costs from providing the new
disclosure. The Bureau estimates the annual number of notices that would be sent to borrowers
under the proposed provision to be 22,270. The Bureau estimates that large servicers will incur
internal production costs of approximately 0.003 hours per disclosure, multiplied by 22,270
disclosures, resulting in 67 burden hours. Large servicers will also incur distribution costs of
$0.30 per response from their print vendors for the distribution of the periodic statements, for an
annual aggregate cost of $7,000.

Notice Regarding Outstanding Third-Party Information
Bureau share of respondents
502
Bureau share of responses
22,270
Average frequency per respondent
52
Annual Burden (hrs):
Time per response (hours)
Total (hours)

0.003
67

F. Requirement to Evaluate Multiple Loss Mitigation Applications
Currently, servicers (other than small servicers) are required to comply with the loss
mitigation provisions of § 1024.41 only once during the life of a loan, including the provision of
up to three notices per loss mitigation application. Under the proposed rule, servicers would be
required to comply with the loss mitigation provisions of § 1024.41 for borrowers who have
previously completed a loss mitigation application, so long as the borrower has become current
in the period following the completion of the application.
i.

One-time burden

The Bureau estimates that, for each covered person, one lawyer and one compliance
officer would take 0.05 hours each to read and review the sections of the rule that describe the
loss mitigation provision, based on the length of the sections. The burden allocated to the
Bureau respondents is therefore 0.05*2*502=50 hours.
Covered persons that maintain their own software and compliance systems would incur
one-time costs to adapt their software and compliance systems to produce the new forms. The
Bureau estimates that the 30 institutions with their own servicing platforms will each require 8
hours to update their systems. Therefore, the aggregate one-time hourly burden from software
and information technology updates is 30*8=240 hours.
ii.

Ongoing burden

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The Bureau estimates the annual number of notices that would be sent to borrowers under
the proposed provision to be 357,000. The Bureau assumes that the average loss mitigation
action will involve 10 minutes of staff time, for an aggregate industry burden of
357,000*0.167=59,500 hours. Respondents will also have ongoing production and distribution
costs from providing additional disclosure. The Bureau estimates that large servicers will incur
internal production costs of approximately 0.003 hours per disclosure, multiplied by 357,000
disclosures, resulting in 1,071 burden hours. Large servicers will also incur distribution costs of
$0.30 per response from their print vendors for the distribution of the periodic statements, for an
annual aggregate cost of $107,000.

Requirement to Evaluate Multiple Loss Mitigation Applications
Bureau share of respondents
502
Bureau share of responses
357,000
Average frequency per respondent
837
Annual Burden (hrs):
Time per response (hours)
Total (hours)

0.144
60,571

G. Summary
The Bureau’s previous estimates of the ongoing hourly costs for each information
collection prior to application of the proposed rules are listed below.
13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers
Information Collection

Successors in Interest—Regulation X

Per Unit Costs

Early Intervention Written Notices

Quantity

$0.30
746300
$0.30
22,270
Loss Mitigation—Subsequent Applications
$0.30
357,000
Total Burden Costs: ////////////////////// //////////////////
Third-Party Information

Costs
$4,731
$223,890
$6,681
$107,100
$342,402

The Bureau estimates that covered persons will incur total vendor costs of $342,000
associated with producing and mailing the aforementioned disclosures. The Bureau has
previously estimated that the annual vendor costs of complying with certain of the servicing rules
in Regulation X is $4,731,000. Because the successors in interest proposal would increase this
burden by an estimated 0.1%, the estimated vendor costs of the successors in interest proposal is
0.001*$4,731,000 =$4,731. For proposed written notices, the Bureau estimates that large
servicers incur a cost of $0.30 per disclosure to distribute the notices. The estimated total annual
cost burden to respondents of the early intervention written notice requirement is therefore
approximately $0.30*746,300=$223,890; for third-party information notices, approximately
$0.30*22,270=$6,681; and for subsequent loss mitigation applications, approximately
$0.30*357,000=$107,100.
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14. Estimated Cost to the Federal Government
Because the Bureau does not collect any information, the cost to the Bureau is negligible.
15. Program Changes or Adjustments
Summary of Burden Changes

New Burden
Requested
Current OMB
Inventory
Difference (+/-)
Program Change
Discretionary
New Statute
Violation
Adjustment

Total
Respondents
12,711

Annual
Responses
17,854,170

Burden Hours
1,179,078

Cost Burden (O
& M)
7,393,918
7,051,516

12,642

16,585,152

1,115,115

+69

+1,269,018

+63,963

+1,179,747

+58,068

+340,690

+89,271

+5,895

+1,712

+69

+342,402

The Bureau is proposing to make adjustments to disclosures currently required by
Regulation X’s mortgage servicing rules. As described above, this collection is an existing
information collection under Regulation X. For a more detailed description, see the previous
response to A.1 (Justification).
The information collections for the Bureau’s disclosures with respect to successors in
interest, notices of complete application, and notices of delayed evaluation pending receipt of
third-party information are new requirements under the proposed rule. The agency is therefore
increasing the burden by 63,963 hours and by $342,402 in costs burden. The additional burdens
resulting from the proposed disclosure requirements are recorded as program changes. We have
also increased our estimate of affected respondents from 12,642 to 12,711. The burden resulting
from the new estimate for respondents is recorded as an adjustment. For a more detailed
explanation of these adjustments, see the previous response to A.1 (Justification).
16. Plans for Tabulation, Statistical Analysis, and Publication
The information collections are third-party disclosures. There is no publication of the
information.
17. Display of Expiration Date
The OMB number will be displayed in the PRA section of the notice of final rulemaking
and in the codified version of the Code of Federal Regulations. Further, the OMB control
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number and expiration date will be displayed on OMB’s public PRA docket at
www.reginfo.gov.
18. Exceptions to the Certification Requirement
The Bureau certifies that this collection of information is consistent with the requirements
of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an
exemption to these certification requirements.

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