CFPB | Putting the ‘service’ back in ‘mortgage servicing’

Putting the ‘Service’ back in ‘Mortgage Servicing’


Today, we’re proposing new mortgage servicing rules.

So, what’s mortgage servicing and why does it need the new rules?

The short answer is that mortgage servicing is the processing of mortgage payments. That may sound simple, but as many borrowers have learned in the aftermath to the financial crisis, it can get complicated very quickly.

When you make a mortgage payment, part of that pays interest on the money that you borrowed, and part of that actually repays the money that you borrowed. Often the company that owns your mortgage hires someone else – a servicer – to collect and apply these payments, along with handling other day-to-day responsibilities in administering the loan.

This can be a challenge due to sophisticated mortgage products, partial payments, delinquent borrowers, fees, errors and misunderstandings. And when consumers can’t make their mortgage payments, servicers are the ones that decide what to do. As we saw during the recession, not all servicers were prepared to handle these challenges. And that can have very bad consequences for consumers.

Why are you proposing new rules?
When an agency writes a new rule, that rule must first be proposed, and the public has an opportunity to comment it. After we get your comments we’ll review them and consider them while we’re writing the final rule.

How did you arrive at these rules?
Several of them are required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (which we call the Dodd-Frank Act for short). We developed others in response to issues in the marketplace. To do this, we have spent a lot of that time talking to the public because we want to write rules that work. For us, rules that work are rules that protect consumers, are consistent with other rules that apply to servicers, recognize the impact on lenders and mortgage investors, and do not cause unnecessary burden on industry. So, in addition to meeting with consumers, consumer advocates, servicers, trade associations, and mortgage investors, we worked with a design team, conducted consumer testing, and met with small servicers to develop these proposals.

What are the new rules?
We are proposing rules on mortgage servicing to implement new laws in the Dodd-Frank Act. Our proposals have new rules that are designed to put the service back in mortgage servicing, and will benefit borrowers by eliminating surprises and run-arounds. The rules are divided into two proposals – one to amend the regulations in the Truth in Lending Act (Regulation Z) and the other to amend the regulations in the Real Estate Settlement Procedures Act (Regulation X). The rules are:

  1. Monthly mortgage statements
    Servicers would be required to provide clear billing statements including information on the loan, amount due, and application of past payments.
  2. Warnings before interest rate adjustments
    Servicers would be required to provide consumers with a new notice 6 to 7 months before the first rate adjustment, as well as earlier and improved notices before rate adjustments causing an increase in a consumer’s mortgage payments.
  3. Force-placed insurance
    Servicers can only charge borrowers for buying insurance on the property when they have a reasonable basis to believe that the borrowers have let their own insurance lapse and have given borrowers two notices estimating the cost of the “force-placed insurance.”
  4. Early outreach for delinquent borrowers
    Getting a delinquent borrower back on track requires early intervention and information about options available.
  5. Prompt crediting of payments
    Payments must be applied as of the day they are received, and the handling of partial payments is clarified.
  6. Accurate information management
    Servicers must have reasonable policies to ensure that when borrowers provide documents and information the servicers can find and use them.
  7. Error resolution and information requests
    Mistakes happen, but they need to get fixed. Servicers must address borrower concerns about possible errors within certain timeframes and provide the information they request.
  8. Direct and ongoing access to servicer personnel
    Delinquent borrowers will be able to contact the right people at their servicer to get information and take steps to avoid foreclosure.
  9. Evaluation for alternatives to foreclosure
    Servicers would be required to appropriately review borrower applications for loan modifications or other options to avoid foreclosure.

How can I get involved?
We want your comments by October 9 – here’s how to weigh in:



5 Responses to “CFPB | Putting the ‘service’ back in ‘mortgage servicing’”
  1. Mary Marseglia says:


    I too want to know how the hell these AH’s get away from not doing major jail time!!!! Also, on these new rules, what the hell is freaken going on!!! You know what, these banks never even use their own money to do mortgage loans!!!! Why should we even have to pay the money back that they say ‘WE OWE” MY LOAN HAS BEEN PAID 7X!!!! PLUS IF MY HO– USE FORECLOSES, THEN THE BANKS WOULD GET PAID AGAIN BY STARTING THE WHOLE MORTGAGE LENDING TO NEW OWNER!!!!

    Here are the 7x on how my loan was paid, and BOFA is still coming after me again to start foreclosure proceedings after it was thrown out once by the judge just because it was on the books for over 1yr, and that the bank gets to start the process of foreclosure again, which I received letter 3/31/12 and have been fighting with them ever since and I’m looking for reputable Securitization & Forensic Audits(company that is honest and doesn’t screw you for asking more than $3,000 which is outrageous!!!!)

    1) they never used their own money so they haven’t lost it because I’m in default. Reserve banking system prints money for the original loan.
    2) they get paid 1.05x-1.5x face value of the loan for securitizing the loan.
    3) they also get to own stock in the REMICS up to 10% of the trusts.
    4) they got paid by TARP $3.5 TRILLION DOLLARS!!!!
    5) they got paid by FDIC when default went over certain amount of days and receive 70%-80% of loan value
    6) AIG pays them when a loan defaults(and we tax payers bailed out AIG)
    7)my loan was FHA guaranteed loan so they already got paid by FHA too & they get paid 90%-100% of the loan value
    8) starts all over again IF I lose my house to foreclosure and its starts all over for the new owner

    And no I don’t want to lose my house but BOFA has f…..k’d me in my butthole and I’m tired of all the stress they created for over 1 1/2 and now it is starting all over again. I hadn’t heard from them since July 2011 and here we go again!!!

  2. D Bass says:

    Corruption at every level, criminal behavior, so when and why are we not emptying the prisons so the bankers
    can live 60 yrs, (minimum for stealing trillions of dollars from students, homeowners, investors, and taxpayer.s. We even empty out treasure to pay off their bets, after they made sure these homeowners loan would go into default, what a better way to get to own some of America for free. This is tryranny.
    The worse their behavior, the more they are rewarded. Next the supreme court or congress will make a new law that we can not take these poor little old bankers to court, “they did not intend to do bad”. I am from Texas
    and we call that BS (pardon my language). Bring back the gullotine, just for these crooks.

  3. Anynomous says:

    The proposed rule that the servicer doesn’t have to respond to questions that are “overly broad” is a catastrophe! My servicer already used that argument, denying to show the note with endorsements and denying itemizing thousands of dollars of pre-foreclosure fees.

  4. Angel says:

    WOW!!!!!i 100% agree with what i’ve read about the NEW changes,it will help more than you know,I’m still in a battle that my family SHOULD NOT of had a part of their lives,& had these simple,fair,guidelines been enforced MILLIONS like our family would& could enjoy the American Dream,My dealings with the cfpb has been a LIFE SAVER,& i mean that from the bottom of my heart,i was ignored,bullied,talked to like a dog by lender,but i knew we had done ALL required to get our home,& NEVER missed pymts,0=resolution UNTIL CFPB,im now doing all i can do legally to keep our home,so the powell family THANKS YOU,for your time,knowledge,& quick response’s ..KEEP UP THE GREAT WORK!!!!! AMERICAN’S NEED”S MORE LIKE YOU!!!!!!!

    • Sarah says:

      Never missed a payment? Congrats. Good thing the CFPB was on your side. All those people who didn’t make their payments, no help for you from the CFPB!
      The CFPB doesn’t “do” appraisal fraud, origination fraud, fraudulent affidavits, robosigning, FDCP violations, etc, etc, etc. That would be the Justice Department, unfortunately they don’t “do” much of anything, except cover for Banksters. MORE AMERICANS NEEDED TO OCCUPY!

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