New York State Department of Financial Services has issued an update regarding Regulations for Servicing Mortgage Loans (Part 419). Please review this explanatory letter before continuing.
Here is a link to the rules that became effective Dec 18, 2019 with a grace period up to March 17, 2020.
In short, the law requires that entities be registered with the Superintendent in order to engage in the business of servicing mortgage loans in this state. Nationally, most affiliates that service in-house are considered a small servicer under federal law, however, it does not appear that these exemptions extended to small servicers apply under New York state law.
What if your mortgages are already outsourced?
Even if your mortgages are being serviced by a third-party entity, your affiliate is considered to be a “passive mortgage loan servicer” and must abide by state laws. The link to the Passive Mortgage Loan Servicer Exemption, along with the formal definition, can be found here.