Consumer Bureau to Crack Down on Mortgage Servicers
he Consumer Financial Protection Bureau will announce Tuesday that it’s considering new rules aimed at mortgage servicers to help protect consumers against “costly surprises.”
The bureau’s new rules will require servicers to issue mortgage statements that are more clear, as well as better disclosures about any fees or changes in a loan’s interest rate.
“For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress,” said Richard Cordray, director of the consumer bureau in a statement issued Monday. “It’s time to put the ‘service’ back in mortgage servicing.”
This would be the federal government’s first major move to crack down on the entire mortgage servicing industry, including big banks that service mortgages, since the housing bust and resulting financial crisis.
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The new rules coincide with new standards set forth by a large settlement deal between states attorneys general and the five largest mortgage servicing banks. Those standards only impact the five largest banks and are aimed at halting robosigning and other improper foreclosure practices on homeowners who are late with payments.
The Consumer Financial Protection Bureau’s rules would ask all servicers to ensure better transparency for all borrowers — not just those whose loans are delinquent. The rules would take effect next January, according to the bureau.