The Consumer Financial Protection Bureau (CFPB) has announced that it will outline rules it is considering to ‘help protect mortgage borrowers from being hit by costly surprises or getting the runaround from their mortgage servicer.’ The CFPB plans to formally propose rules this summer and finalize them in January 2013.
‘The mortgage servicing rules we are considering reflect two basic, common-sense principles – no surprises and no runarounds,’ says CFPB Director Richard Cordray. ‘For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress. It's time to put the 'service' back in mortgage servicing.’
The rules under consideration include the creation of ‘clear monthly mortgage statements’ for borrowers; advance warnings to borrowers of interest-rate adjustments; the option for avoiding ‘costly force-placed insurance’; ‘good faith attempts’ by servicers to contact delinquent borrowers who are on the road to foreclosure; and ‘direct and ongoing access’ to a ‘foreclosure prevention team.’
The CFPB expects to publish a notice of proposed rulemaking this summer, which will be followed by a public comment period. The rules will be finalized by Jan. 21, 2013.
The full mortgage servicing rules under consideration are available online.Â