CFPB Report Identifies Mortgage Servicing Issues

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It is believed that this is not a wide spread problem but it should not be happening at all. Please read the article below and let me know what you think.

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After examining practices from mortgage servicers, the Consumer Financial Protection Bureau (CFPB) found servicing problems such as disorganized account transfers and loss mitigation mistakes, according to a report.

The CFPB’s report was based on the examination of bank and non-bank servicers from November 2012 and June 2013.

“Our examinations of banks and nonbanks allow us to correct problems before more consumers are affected,” said CFPB Director Richard Cordray. “Today’s report highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are following federal law. Fixing both is a priority for us.”

When pinpointing problems with mortgage servicing transfers, the CFPB identified risks that could lead to missed payments from consumers.

Examiners detected issues such as unlabeled and unorganized paperwork, failures from servicers to communicate new servicing transfers to borrowers and a lack of protocols on how to handle and organize certain documents such as loan modification agreements.

The report also discovered issues with payment processing. One example provided was of a servicer that did not provide adequate notice on where to send payments after a change in address. When the CFPB alerted the servicer, the company ensured late fees and other negative consequences would not be enforced.

To read the complete article – please use the link below.

Mortgage Servicing Issues

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