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By: Litigation and Creditors’ Rights & Bankruptcy Practice Groups
Citing the widespread concern that many mortgage servicers lack adequate computer systems which prevent them from following CFPB mortgage servicing regulations (the majority of which became effective in January, 2014), the CFPB has issued new guidance on mortgage servicing examination procedures. CFPB Director Richard Cordray, in a public statement about the new guidance, stated “Mortgage servicers can’t hide behind their bad computer systems or outdated technology. There are no excuses for not following federal rules.” The CFPB Press Release cited two main regulatory violations that the mortgage service examination manual is intended to address. First, CFPB examiners found many problems with loan modification acknowledgement notices going out to consumers, such as the notices were untimely, or the information incorrect or deceptive. Second, CFPB examiners were concerned with consumers getting “the runaround” when loans transfer to a new servicer. Both of these concerns, however, center around technological concerns with loan servicer’s computer systems and compatibility. Mr. Cordray has taken a hard stance on behalf of the CFPB, and said “Mortgage servicers and their service providers must step up and make the investments necessary to do their jobs properly and legally.”
For more information, or to see the new updated mortgage servicing exam procedures, go to the CFPB website at: http://www.consumerfinance.gov/policy-compliance/guidance/supervision-examinations/mortgage-servicing-examination-procedures/[/vc_column_text][/vc_column][/vc_row]