CFPB Offers Additional Guidance on Mortgage Servicing Rules

Are these long overdue greatly needed changes in the rules or just the CFPB trying to cover their butts after the housing meltdown? For a more detailed look at this subject please read the article below.

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The Consumer Financial Protection Bureau (CFPB) released a bulletin and interim final rule Tuesday to provide greater clarity to the market concerning mortgage servicing rules that take effect January 2014.

The clarifications address contact with delinquent borrowers, communications with family members after a borrower dies, and treatment of consumers who have filed for bankruptcy or invoked certain protections under the Fair Debt Collection Practices Act (FDCPA).

Stressing that many borrowers still “continue to experience serious problems seeking loan modifications or other alternatives to avoid foreclosure,” the CFPB said these new rules are intended to establish strong protections for struggling homeowners and protect them from “costly surprises and runarounds by their servicers.”

Guidance issued by the CFPB Tuesday is in response to public requests for further explanation on three specific servicing issues: early intervention requirements; home retention efforts after a borrower dies; and interplay between the servicing rules, bankruptcy code, and FDCPA.

“As servicing implementation enters its final phases, we heard from many sources that it was important to address these remaining issues to ensure a smooth transition and provide certainty to the market,” said CFPB Director Richard Cordray.

The new rules require servicers to attempt contact with borrowers each time they miss a payment. CFPB’s latest bulletin clarifies that this requirement may be satisfied by other contact servicers have with such borrowers, for example, when evaluating them for loss mitigation options or during collection calls. The CFPB noted that the method of contact can vary depending on number of days delinquent or on whether the borrower has responded to earlier communication attempts by the servicer.

To read the complete article please use the link below.

Mortgage Servicing Rules

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