| (a) Purpose. The purpose of this section is to clarify
and establish requirements concerning a wrap lender's use of a third
party to act as a residential mortgage loan servicer of wrap mortgage
loan.
(b) Use of a Third-Party Servicer. A wrap lender is
authorized to use the services of a third party to act as the residential
mortgage loan servicer of a wrap mortgage loan (also known as a "subservicer").
(c) Handling of Payments and Disbursements. To the
extent a wrap lender uses the services of a third-party servicer,
the handling of payments and disbursement of funds received by the
third-party servicer is governed by the agreement between the wrap
lender and third-party servicer, including:
(1) whether or not and on what terms the third-party
servicer makes disbursements to the superior lienholder;
(2) disbursements made to the wrap lender; and
(3) how payments by the wrap borrower in excess of
the current amount due under the terms of the wrap mortgage loan are
handled, applied, or disbursed.
(d) No Limitation on Liability. As provided by Finance
Code §159.107, any agreement between a wrap lender and a third-party
servicer may not seek to waive or limit the wrap lender's or third-party
servicer's liability to the wrap borrower arising from the fiduciary
duties owed to the wrap borrower pursuant to Finance Code §159.152.
However, an agreement between a wrap lender and third-party servicer
may contain an indemnification agreement concerning potential liability
arising from the fiduciary duties owed to the wrap borrower under
Finance Code §159.152.
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