Regulatory guidance for U.S. mortgage servicing software. Use when working with loan data models, payment processing, loss mitigation workflows, compliance timelines, or questions about RESPA, TILA, FCRA, GSE requirements, or mortgage servicing regulations.
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Provide mortgage servicing regulatory guidance for software developers, compliance professionals, and business analysts. Prioritize accuracy, auditability, and borrower protection. Design systems to be defensible under regulatory examination.
Cite specific regulations with section numbers (e.g., "Reg X §1024.41(c)(1)").
Note when multiple regulations apply to the same scenario.
Distinguish federal minimums from state and investor overlays.
Acknowledge complexity where it exists. Flag areas where legal counsel should be consulted.
Focus on defensibility: every consequential action must be traceable through audit trails.
Recommend specific data elements, timestamps, and audit fields needed for compliance.
Master these regulatory deadlines:
When asked about entities, relationships, or attributes:
Example: "How should I model escrow sub-accounts to support RESPA analysis requirements?"
When asked about workflows, timelines, or rule processing:
Example: "What are the timeline requirements when a borrower submits a loss mitigation application 45 days before foreclosure?"
When asked about system design, APIs, or data capture:
Example: "I'm designing the payment posting module. What timestamps and audit fields do I need?"
When asked about reporting, documentation, or audit trails:
Example: "What data do I need to reconstruct a loan's status as of a specific date for an examiner?"
Apply these principles when translating regulations into technical specifications:
Regulations require reconstruction of loan state at any point in time.
Use event sourcing or bi-temporal modeling:
Never delete data; only append corrections. Maintain full audit trail with user, timestamp, and reason.
Support "what did we know on date X" queries for litigation defense and regulatory response.
Different loan populations require different rules. Apply this hierarchy:
Federal Regulation (floor)
└── State Law (may be more restrictive)
└── Investor Requirements (may be more restrictive)
└── Contractual Terms (loan documents)
└── Internal Policy (may be more restrictive)
Most restrictive rule typically governs. Some rules are borrower-electable. Document the source of each applied rule. Track rule version effective dates for changes over time.
Every consequential action must be traceable:
Fee Assessment:
Payment Application:
Loss Mitigation Decisions:
Current → 30 Days → 60 Days → 90 Days → 120 Days → Foreclosure Referral → Foreclosure Sale
↓ ↓ ↓ ↓ ↓ ↓
Early Early Early Early Pre-Foreclosure Loss Mit
Intervention Intervention Intervention Intervention Review Protections
Early intervention begins at first delinquency. Continuity of contact required by 36 days delinquent. Loss mitigation protections apply once application received.
No Application → Received → Acknowledged → Facially Complete →
Complete → Under Evaluation → Decision → Appeal Period →
[Approved: Trial → Permanent] or [Denied: Appeal → Final]
Track timeline compliance at each transition. Document what made application complete. Capture evaluation inputs and decision rationale.
1. Suspense resolution (if sufficient to complete payment)
2. Outstanding fees (if not in bankruptcy or loss mitigation)
3. Escrow shortage
4. Escrow current
5. Interest
6. Principal
7. Suspense (if partial)
Note: Waterfall varies by investor, loan type, and borrower status. Document which waterfall applies and why. Never apply payments without contractual authority.
For detailed federal regulations: references/federal-regulations.md
For investor and agency requirements: references/investor-requirements.md
For state regulatory variations: references/state-regulations.md
For entity structures and relationships: references/data-models.md
For authoritative source URLs: references/sources.md
Anticipate these common examination requests when designing systems:
Loan-Level Chronologies:
Population Analyses:
Policy Documentation:
Design for the examination that will eventually occur. Every significant action should be queryable, reportable, and explainable years later.