N.Y. Comp. Codes R. & Regs. Tit. 3 § 419.13 - Affiliated relationships

(a) Within 10 days of entering into an affiliated relationship, servicers must provide to each borrower whose mortgage loan is subject to such arrangement, a written disclosure of the nature of the relationship (explaining the ownership and financial interest) between the parties to the arrangement and of an estimated charge or range of charges generally made by such affiliate.

(b) All affiliated relationships must be negotiated at market rate and a servicer shall neither give nor accept any fee, kickback or other thing of value pursuant to any affiliated relationships other than payments listed in section 419.5 of this Part; and

(1) a return on an ownership interest which does not include:

(i) any payment which has as a basis of calculation no apparent business motive other than distinguishing among recipients of payments on the basis of the amount of their actual, estimated or anticipated referrals;

(ii) any payment which varies according to the relative amount of referrals by the different recipients of similar payments; or

(iii) a payment based on an ownership, partnership or joint venture share which has been adjusted on the basis of previous relative referrals by recipients of similar payments.

(2) bona fide dividends, and capital or equity distributions, related to ownership interest or franchise relationship, between entities in an affiliate relationship; or

(3) bona fide business loans, advances, and capital or equity contributions between entities in an affiliate relationship (in any direction), so long as they are for ordinary business purposes and are not fees for the referral of settlement service business or unearned fees.

Notes

N.Y. Comp. Codes R. & Regs. Tit. 3 § 419.13

Amended New York State Register December 18, 2019/Volume XLI, Issue 51, eff. 12/18/2019