The Consumer Financial Protection Bureau has proposed new requirements for mortgage servicers “to provide clear monthly statements, earlier disclosures for interest rate adjustments and options to help borrowers avoid foreclosures and costly force-placed insurance,” writes American Banker’s Kate Berry.
"These proposed rules would offer consumers basic protections and put the 'service' back into mortgage servicing," said CFPB Director Richard Cordray.
This proposal is similar to the plan released in April by the agency.
The requirement for early warning on interest rate adjustment has drawn concern. "It's not helpful for consumers to get information that isn't accurate and it's going to cause confusion if all the servicer can do is make a best estimate," says Robert Cook of HudsonCook LLC.
There's also some concern about the force-placed insurance rules, but “many of the other requirements are already part of most servicers' processes, including promptly crediting payments to a consumer's account as of the date received, and maintaining accurate and accessible documents and information,” writes Berry.
The comment period on the proposal is open until Oct 9.
For the full piece see "CFPB Unveils Revamp of Mortgage Servicing Standards" (may require subscription).