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CFPB Urges Mortgage Servicers to Upgrade Technology to Reduce Errors

WASHINGTON—The Consumer Financial Protection Bureau on Wednesday urged mortgage-servicing companies to invest more in technology to reduce delays and errors in handling customer information.

The federal watchdog agency said it found “numerous” mortgage servicers, essentially middlemen between lenders and borrowers, in violation of its 2014 rules requiring them to maintain accurate records. The rules also include protections for homeowners facing foreclosure by requiring companies to provide direct access to servicing personnel, while crediting payments and correcting errors promptly.

The CFPB didn’t name any companies or break out the number of violations it found.

Mortgage servicers are responsible for collecting payments from mortgage borrowers and forwarding them to the owners of loans, as well as handling any loan modifications and foreclosures. Consumers don’t choose their mortgage servicers when a home loan is originated, and loans can be transferred from one servicer to another.

The CFPB’s examiners found the companies haven’t invested enough to comply with the rules, and some lacked proper training and auditing of their computer systems and software platforms. “As a result of this insufficient investment, mortgage servicing problems continue to plague consumers,” the agency said in a press release.

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