Some mortgage servicers have violated the Consumer Financial Protection Bureau’s new servicing rules by continuing to use failed technology that has harmed consumers, according to a special edition supervisory report issued by CFPB on Wednesday. The Bureau reported violations due to deficient technology and process breakdowns as a result of numerous examinations of mortgage servicers since the CFPB’s new servicing rules went into effect in January 2014.
The Bureau’s examiners found specific problems regarding loss mitigation and servicing transfers. Bureau Director Richard Cordray said, quote, Mortgage servicers can’t hide behind their bad computer systems or outdated technology. There are no excuses for not following federal rules. Mortgage servicers and their service providers must step up and make the investments necessary to do their jobs properly and legally. Close quote
The mortgage services industry reached its 25 millionth non-foreclosure solution in April, as foreclosure, short sales, and deed-in-lieu transactions continue to drop, according to HOPE NOW. Eric Selk, Executive Director of HOPE NOW, said, quote, These solutions, whether they are modifications, repayment plans, or short sales, all help homeowners avoid foreclosure. It is a significant milestone. Close quote