Home / Daily Dose / CFPB Identifies Mortgage Servicing Violations
Print This Post Print This Post

CFPB Identifies Mortgage Servicing Violations

The Consumer Financial Protection Bureau (CFPB) has released its Winter 2020 edition of its Supervisory Highlights. discussing the Bureau’s examinations findings in the areas of debt collection, mortgage servicing, payday lending, and student loan servicing that were completed between April 2019 and August 2019.

Key findings include mortgage servicing regulation violations. According to the CFPB, one or more servicers were found to have violated the Regulation X loss mitigation notice requirements to notify borrowers in writing that a loss mitigation application is either complete or incomplete within five days of receiving the application; provide a written notice stating the servicer’s determination of available loss mitigation options within 30 days of receiving a complete loss mitigation application; and provide a written notice containing specified information when the servicer offers the borrower a short-term loss mitigation option based on an evaluation of an incomplete loss mitigation application.

In examinations, examiners found that the servicers violated Regulation X by failing to notify borrowers in writing that an application was either complete or incomplete within 5 days of receiving the application.

According to the CFPB, because the violations were caused, in part, by servicers’ efforts to handle an unexpected surge in applications due to natural disasters and occurred during a time period where the servicers were making specific efforts to address borrower needs arising from the natural disasters, examiners did not issue any matters requiring attention for these violations.  Instead, servicers developed plans to enhance staffing capacity in response to any future disaster-related increases in loss mitigation applications.

The CFPB also found violations regarding payday lending. One or more lenders were found to have violated the Regulation B adverse action notice requirement by sending notices that stated one or more incorrect principal reasons for taking adverse action.  Such violations were attributed to coding system errors.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
x

Check Also

CFPB Issues Support for Financial Institutions

The Bureau is postponing some data collections from industry on Bureau-related rules to allow companies to focus on responding to consumers in need and making changes to its supervisory activities to account for operational challenges at regulated entities.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.