Published: October 2012

Proposed Mortgage Servicing Rules fail to protect families

The Consumer Financial Protection Bureau (CFPB) has proposed important new mortgage servicing regulations that will set the rules for servicing going forward. Unfortunately, the proposed rules fail to fix problems and protect consumers.

Consumer Action and consumer advocates are disappointed in the CFPB's proposed Mortgage Servicing Rules. The proposal seems to deviate from the California Homeowner Bill of Rights and lacks the uniform servicing standards needed to protect families and communities from harmful practices in the mortgage loan service industry.

Several critical issues missing from the proposal include:

  • Loss mitigation
  • Unlawful eviction practices
  • Clarity around homeowner's TILA rights

In addition, recommendations to improve the proposal include:

  • Increase the minimal notice time for adjustable-rate mortgage and interest-rate adjustment notices
  • Simplify payment notices and include a printed disclosure of the payment dispute process and a summary of the borrower’s rights under the QWR process on each
  • Add a non-exhaustive list of types of errors covered and a catch-all provision that allows borrowers to seek redress for other types of servicing errors not listed explicitly
  • Standardize management policies and procedures across the mortgage service industry to eliminate cursory practices

Lead Organization

California Reinvestment Coalition

Other Organizations

Housing and Economic Rights Advocates | California Reinvestment Coalition | Law Foundation of Silicon Valley | National Housing Law Project | Project Sentinel | Consumer Action

More Information

Visit California Reinvestment Coalition for more information.

Download PDF

Proposed Mortgage Servicing Rules fail to protect families   (CFPB_Servicing_Comments_Summary.pdf)

 

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