Your bank will be deemed to be a “small servicer” if the bank and all of its affiliates were servicing 5,000 or fewer residential mortgage loans as of January 1 of this year, provided that your bank (or its affiliates) originated or currently owns those loans.

Your bank will not qualify as a “small servicer” if it services any mortgage loans that your bank or its affiliates did not originate or have not purchased. As stated in the Official Interpretations for Regulation Z, if a servicer services mortgage loans that it neither owns nor originated, it “is not a small servicer . . .  notwithstanding that the servicer services fewer than 5,000 mortgage loans.”

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.41(e)(4) (“A small servicer is a servicer that: Services, together with any affiliates, 5,000 or fewer mortgage loans, for all of which the servicer (or an affiliate) is the creditor or assignee. . . .”)

• Regulation Z, 12 CFR 1026.41(e)(4)(iii) (“In determining whether a servicer satisfies paragraph (e)(4)(ii)(A) of this section, the servicer is evaluated based on the mortgage loans serviced by the servicer and any affiliates as of January 1 and for the remainder of the calendar year. . . .”)

• Official Interpretations, Regulation Z, 12 CFR 1026, Paragraph 41(e)(4)(ii), Comment 2 (“ . . . There are two elements to satisfying § 1026.41(e)(4)(ii)(A). First, a servicer, together with any affiliates, must service 5,000 or fewer mortgage loans. Second, a servicer must service only mortgage loans for which the servicer (or an affiliate) is the creditor or assignee. To be the creditor or assignee of a mortgage loan, the servicer (or an affiliate) must either currently own the mortgage loan or must have been the entity to which the mortgage loan obligation was initially payable (that is, the originator of the mortgage loan). A servicer is not a small servicer under § 1026.41(e)(4)(ii)(A) if it services any mortgage loans for which the servicer or an affiliate is not the creditor or assignee (that is, for which the servicer or an affiliate is not the owner or was not the originator). . . .”)

• Official Interpretations, Regulation Z, 12 CFR 1026, Paragraph 41(e)(4)(iii), Comment 2(ii) (“A servicer services 3,100 mortgage loans — 3,000 mortgage loans it owns or originated and 100 mortgage loans it neither owns nor originated, but for which it owns the mortgage servicing rights. The servicer is not a small servicer because it services mortgage loans for which the servicer (or an affiliate) is not the creditor or assignee, notwithstanding that the servicer services fewer than 5,000 mortgage loans.”)