Advertisement

April 24, 2014

Consumer Financial Protection Bureau "CFPB" Releases Final Mortgage Servicing Rules

On January 17, the Consumer Financial Protection Bureau (CFPB or Bureau) published its final rules related to consumer mortgage loan servicing.

Typically, mortgage servicers are responsible for collecting payments from mortgage borrowers on behalf of loan owners and are responsible for collecting borrower payments and handling issues related to customer service, escrows, collections, loan modifications and foreclosures on behalf of the loan owner. Most often, such servicers are selected by mortgage note holders, not consumers.

The final rule contains a number of protections for consumers who are having difficulty with their mortgage obligations, including the following: (1) a provision that prevents “dual tracking” of delinquent loans, which involves the commencement of a foreclosure proceeding at the same time a consumer seeks a loan modification; (2) a provision that prevents servicers from making the first notice or filing required in the foreclosure process until a mortgage loan account is more than 120 days delinquent; (3) a requirement that servicers provide consumers with personnel responsible for assisting them when repayment difficulties arise; and (4) a requirement that servicers consider and respond to a borrower’s application for a loan modification if it arrives at least 37 days before a scheduled foreclosure sale.

In addition, the final rule requires that mortgage servicers provide to all consumer borrowers enhanced disclosures, including monthly mortgage statements that contain prescribed information (including a breakdown of payments by principal, interest, fees and escrow amounts) as well as an “early warning” disclosure to most consumers before their interest rate adjusts.

The final rule includes certain exemptions for small servicers that service 5000 or fewer mortgage loans that they or an affiliate either own or originated.

The final rule goes into effect mid-January 2014.

For more information, click here.

©2014 Katten Muchin Rosenman LLP

About the Author

Christina J. Grigorian, Banking Attorney, Katten Muchin Law firm
Special Counsel

Christina J. Grigorian counsels clients in all matters related to banks, bank holding companies, and state and foreign-licensed consumer and commercial lenders. Ms. Grigorian provides advice to the firm’s financial institution clients concerning structural and operational issues, including legislative developments impacting such operations, and has worked with companies and individuals in the establishment of de novo entities, including national banks, federal savings banks and state-chartered institutions, as well as state-licensed lenders. She has also counseled clients with...

202-625-3541

Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.