Montana Code 32-9-206. Financial condition of servicers
32-9-206. Financial condition of servicers. (1) A covered institution shall maintain capital and liquidity in compliance with this section.
Terms Used In Montana Code 32-9-206
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Covered institution: means a nonbank servicer:
(a)with servicing portfolios of 2,000 or more 1- to 4-unit residential mortgage loans serviced or subserviced for others, excluding whole loans owned, and loans being interim serviced prior to sale as of the most recent calendar year end, reported in the NMLS mortgage call report; and
(b)that operates in two or more states, districts, or territories of the United States either currently or as of the prior calendar year end. See Montana Code 32-9-201
- Department: means the department of administration provided for in 2-15-1001, acting through its division of banking and financial institutions. See Montana Code 32-9-201
- GSE: means government-sponsored enterprises, the federal national mortgage association, or the federal home loan mortgage corporation. See Montana Code 32-9-201
- liquidity: means the financial resources necessary to manage liquidity risk arising from servicing functions required in acquiring and financing mortgage servicing rights, hedging costs, including margin calls, associated with the mortgage servicing rights asset and financing facilities, and advances or costs of advance financing for principal, interest, taxes, insurance, and any other servicing related advances. See Montana Code 32-9-201
- Operating liquidity: means the funds necessary to perform normal business operations, such as payment of rent, salaries, interest expense, and other typical expenses associated with operating the entity. See Montana Code 32-9-201
- Servicer: means the entity performing the routine administration of residential mortgage loans on behalf of the owner or owners of the related mortgages under the terms of a servicing contract. See Montana Code 32-9-201
(2)For the purposes of complying with the capital and liquidity requirements of this section, all financial data must be determined in accordance with generally accepted accounting principles.
(3)A covered institution that meets the federal housing finance agency eligibility requirements for enterprise single-family seller/servicers for capital, net worth ratio, and liquidity, regardless of whether the servicer is approved for GSE servicing, meets the requirements of subsections (1) and (2).
(4)Covered institutions shall maintain written policies and procedures implementing the capital and servicing liquidity requirements as set by the department by rule.
(5)Covered institutions shall maintain sufficient allowable assets for liquidity, in addition to the amounts required for servicing liquidity, to cover normal business operations.
(6)Covered institutions shall have in place sound cash management and business operating plans as set by the department by rule.
(7)Covered institutions shall develop, establish, and implement plans, policies, and procedures for maintaining operating liquidity sufficient for the ongoing needs of the institution. The department shall set further requirements for operating liquidity by rule.