2015 MS FAQ Dealings with Borrowers



These questions and answers constitute informal guidelines only and do not constitute legal advice or rules by DFI.  Any interpretations of Chapter 454M, HRS, are specific to the facts and circumstances in each particular situation.  Questions and answers will be updated and supplemented as DFI develops additional guidance.  Additional answers can be found using the NMLS Resource Center.

If additional guidance is required on a unique situation in your company or for yourself, you may send your inquiry via letter or email to:

Division of Financial Institutions
Department of Commerce and Consumer Affairs
P.O. Box 2054
Honolulu, HI 96805
[email protected]


What are the general duties of a mortgage servicer pertaining to its dealings with borrowers?
Chapter 454M, HRS, provides that a mortgage servicer:

  • Has a duty of good faith and fair dealing in its communications, transactions, and course of dealings with each borrower in connection with the servicing of the borrower’s mortgage loan, Section 454M-5(a), HRS;
  • Shall safeguard and account for any money handled for the borrower, Section 454M-5(b), HRS;
  • Shall follow reasonable and lawful instructions from the borrower consistent with the underlying note and mortgage, Section 454M-5(b), HRS; and
  • Shall act with reasonable skill, care, timeliness, promptness, and diligence, Section 454M-5(b), HRS.

Other specific duties of a mortgage servicer in its dealings with borrowers are discussed below.

What requirements apply to handling consumer complaints and inquiries?
A mortgage servicer must comply with the following requirements concerning handling consumer complaints and inquiries:
(1)     Follow the requirements of the Real Estate Settlement Procedures Act  (“RESPA”), including requests for error and information resolution procedures under title 12 C.F.R. sections 1024.35 and 1024.36 ;
(2)     In addition to RESPA requirements, establish and maintain a system to respond to and resolve borrower inquiries and complaints in a prompt and appropriate manner;
(3)     Within ten business days of receiving a request in writing from a borrower or the borrower’s authorized representative, provide the borrower with the name, address, phone number or electronic mail address, if available, and other relevant contact information for the owner or assignee of the mortgage loan; and
(4)     In addition to the information required to be disclosed under Section 454M-5(h), HRS , at its option, provide any other information regarding the servicing of the loan that the mortgage servicer believes would be helpful to a borrower; provided that any additional information does not contradict or obscure the required disclosures.  Section 454M-5(h), HRS.