January 17, 2014

Petraeus: More than one-third of military complaints mortgage-related

Jan. 21, 2014 – More than one-third of military consumer complaints received by the agency are mortgage-related, and announced new rules to address the most pressing issues arising in the complaints, CFPB Assistant Director of Servicemember Affairs Holly Petraeus wrote in a blog post Thursday.

"At listening sessions around the country, concerned military families have told me about the painful consequences of poor mortgage servicing, sloppy lender recordkeeping, and inconsistent foreclosure practices," Petraeus wrote. "Obviously, servicemembers aren't the only homeowners who have run into trouble with mortgage servicers or faced financial hurdles. But the demands of military service sometimes increase the severity of the problems or limit the solutions available to address them."

Petraeus highlighted CFPB's plans to restrict dual tracking, a practice in which mortgage servicers start foreclosing on a borrower while also working on a potential loan modification. She also noted new rules requiring mortgage servicers to evaluate borrowers for all options available to help them keep their homes, instead of requiring them to apply for different programs over a long period of time. Finally, Petraeus noted rules that require mortgage servicers to make sure borrowers get help with questions, and make sure documents are accounted for.

Petraeus also referenced an agency guidance from June of 2012 – issued jointly with other regulators – requiring mortgage servicers to have procedures in place to help servicemembers with Permanent Change of Station orders, adding that government-sponsored enterprises Fannie Mae and Freddie Mac categorized a PCS order as a "qualifying hardship" for mortgage assistance in 2011.