CFPB rules help consumers avoid foreclosure
Tuesday, April 10, 2012
WASHINGTON – Consumers Union, the policy and advocacy arm of Consumer Reports, today praised an outline unveiled by the Consumer Financial Protection Bureau (CFPB) for setting new rules for mortgage servicing.
In a statement, the CFPB said the rules under consideration would “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 complete them in January 2013.
Pamela Banks, senior policy counsel for Consumers Union, said, “If we had more transparency and accountability in mortgage servicing, fewer homeowners would have lost their homes during the foreclosure crisis. The CFPB is doing the right thing by stepping up to hold mortgage servicers accountable and help consumers avoid surprises.”
Banks said, “When you get a mortgage to buy a home, the whole process can be incredibly frustrating and confusing. Too often, when you sign your name on the dotted line, you don’t get the clear, reliable information that you really need. These rules would help change that.”
The rules under consideration at the CFPB include requirements for clear monthly mortgage statements, alerts for customers before the interest rates changes, early information and options for avoiding foreclosure, and measures to ensure a customer’s account is credited immediately after the mortgage servicer receives payment.
In its outline, the CFPB explained how a mortgage servicer is responsible for collecting payments from the mortgage borrower on behalf of the owner of the loan. Mortgage servicers also typically handle customer service, escrow accounts, collections, loan modifications, and foreclosures. “In the vast majority of cases, consumers do not choose their mortgage servicer,” the bureau stated.
The CFPB has a fact sheet about the rules under consideration here: