§ 1024.35(e)(4)

Section-by-section analysis

35(e)(4) Copies of Documentation

Proposed § 1024.35(e)(4) would have required that, where a servicer determines that no error occurred and a borrower requests the documents the servicer relied upon, the servicer must provide the documents within 15 days of the servicer's receipt of the borrower's request. The Bureau proposed comment 35(e)(4)-1 to clarify that a servicer would need only provide documents actually relied upon by the servicer to determine that no error occurred, not all documents reviewed by a servicer. Further, the proposed comment stated that where a servicer relies upon entries in its collection systems, a servicer may provide print-outs reflecting the information entered into the system.

Some industry commenters questioned the utility of providing documents relied upon to borrowers, noting that borrowers may not understand how to interpret the documents printed from servicers' systems. Industry commenters said providing such documents will be burdensome, and one commenter added that the Dodd-Frank Act neither requires nor contemplates such a requirement. One commenter urged the Bureau to clarify that servicers need only provide borrowers a summary of information that is stored electronically and not in a producible format. And several industry commenters urged the Bureau to limit servicers' responsibility to provide documents that reflect trade secrets or other sensitive information.

The Bureau believes the proposed rule strikes the right balance in that it does not subject servicers to undue paperwork burden but assures that borrowers will have access to underlying documentation if necessary. In certain cases, a borrower may determine that the servicer's response resolves an issue and that reviewing documents would be unnecessary. Thus, the Bureau believes that requiring a servicer to provide documents only upon a borrower's request limits burden. The Bureau understands that servicers may store information electronically and not in a readily producible format. Accordingly, the Bureau is adopting final comment 35(e)(4)-1, which clarifies that servicers may provide a printed screen capture in such situations, as proposed with minor technical amendments. In addition, the Bureau acknowledges industry commenters' concern regarding providing confidential or sensitive information to borrowers. Accordingly, the Bureau has revised proposed § 1024.35(e)(4) to provide that servicers need not produce to borrowers documents reflecting confidential, proprietary or privileged information. Final § 1024.35(e)(4) further provides that if a servicer withholds documents relied upon because such documents reflect confidential, proprietary or privileged information, the servicer must notify the borrower of its determination in writing. The Bureau is otherwise adopting § 1024.35(e)(4) as proposed.