Newsroom

The Consumer Financial Protection Bureau's proposed rules on mortgage servicing were written to reflect two "basic, common-sense standards – no surprises and no runarounds," and are due to be finalized by January, CFPB Director Richard Cordray said in a press call Friday.

The proposed rules, reported here Friday morning, would revise requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act as required under the Dodd-Frank Act. They are aimed at ensuring consumers have the information they need to keep up with their mortgage payments and, if they fall behind, to avoid foreclosure where possible.

"We want to make sure that at all times consumers can get information about how much they owe, what they are paying, and how their payments are being applied," Cordray said. "And if consumers fall behind on their mortgage, we want them to know how to assess their options and take action."

Cordray said the proposed rules will put "service" back in mortgage servicing.

All but the smallest servicers – those servicing fewer than 1,000 mortgages, all originated by them – would have new TILA requirements to issue periodic statements, give earlier warnings about interest-rate changes on adjustable-rate mortgages and promptly contact borrowers when they become delinquent. The new RESPA requirements are focused on the handling of loan modification applications and oversight of contractors and foreclosure lawyers, Cordray said.

The CFPB is working to finalize the rules by January. NAFCU is preparing a Regulatory Alert for members.