Since the financial crisis, more regulation and more oversight have been one of the constants in the mortgage industry. Those on the servicing side have been affected by the changes. Responsible for collecting the mortgage obligation from borrowers on behalf of the owners of the loan, the servicers are often the “middle men” to the transaction. Typically chosen by the lenders, not the borrowers, the CFPB is interested in assuring a level playing field for the consumers and clarity for the servicers. Recently, CFPB Director Richard Cordray, said, “When mortgage servicers better understand the rules they have to follow, that is better for consumers.”
And what is best for consumers is what the CFPB is about. Cordray went on to acknowledge that, though well intentioned, sometimes the transition isn’t as smooth as it could be. “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.”
With the January 2013 implementation date for the new regulations looming, the CFPB sought to clarify the following:
– Home retention efforts after a borrower dies
– Early intervention requirement to contact delinquent borrowers.
– Interplay between the servicing rules, bankruptcy code, and the Fair Debt Collection Practices Act (FDCPA).
You can access the full CFPB bulletin here: http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf