Yesterday, the CFPB issued a new mortgage servicing bulletin and interim final rule clarifying mortgage servicing rules that take effect in January 2014. The guidance is intended to address industry requests for clarification on several servicing rule issues, including:
- Communication with family members after a borrower dies. The bulletin provides examples of policies and procedures on home retention efforts for when a borrower dies, which servicers are required to maintain under the servicing rules taking effect in January 2014.
- Clarifying how servicers can meet the early intervention requirement to contact delinquent borrowers. As described in the bulletin, servicers can satisfy the requirement through other contact that they have with a borrower (for example, during a collection call or loss mitigation evaluation) and the method of contact can vary depending on the circumstances.
- Treatment of consumers who have filed bankruptcy or invoked protections under the Fair Debt Collection Practices Act (FDCPA). The additional guidance clarifies that certain loss mitigation communications are still required even after a delinquent borrower has invoked their right to cease communications under the FDCPA, but other early intervention contacts and ongoing interest rate adjustments are not required. When a borrower is in bankruptcy, servicers are also exempt from the requirement to provide periodic statements and certain early intervention contacts.
The interim final rule also clarifies which mortgage disclosures must be reviewed during the housing counseling required for high-cost mortgage loans. Comments on the interim final rule will be due 30 days after publication in the federal register.
Read the interim final rule: http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_interim.pdf