The proposed amendments were first published in the Federal Register on December 15. CFBP's mortgage rules were first proposed in 2013 and went into effect in January 2014; the proposed amendments to the rules are under the Real Estate Settlement Procedures Act (Regulation X, or REPSA) and the Truth in Lending Act (Regulation Z, or TILA).
"These proposed amendments focus primarily on clarifying, revising, or amending provisions regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X's servicing provisions; and periodic statement requirements under Regulation Z's servicing provisions," the rule states on the Federal Register site. "The proposed amendments also address proper compliance regarding certain servicing requirements when a consumer is a potential or confirmed successor in interest, is in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act."
Noteworthy proposed amendments include:
- For the purpose of RESPA, expanding the definition of "borrower" to include successors in interest, which are defined as members "of any of the categories of successors in interest who acquired an ownership interest in the property securing a mortgage loan in a transfer protected by the Garn-St Germain Act."
- Loosening the requirement that servicers provide both the name of the trust and appropriate contact information for the trustee, which can be burdensome, particularly when the trustee is Fannie Mae or Freddie Mac. The amendment would require the servicers to request only the loan's owner or assignee by providing the name and contact information for Fannie Mae and Freddie Mac if one of the GSEs is the trustee, investor, or guarantor of the loan, and the servicer would not be required to provide the name of the trust. However, the servicer would still be required to give the name or number of the trust pool should the borrower specifically request that information, regardless of whether one of the GSEs is involved in the loan.
- Requiring lenders to offer loss mitigation options to borrowers more than once over the lifetime of a loan, should a borrower become current on his or her loan after a delinquency. Currently, lenders are required to offer loss mitigation to a borrower only once over the life of a loan regardless of the borrower's payment history.
Interested parties may submit a comment on the proposed amendments by visiting www.regulations.gov or emailing [email protected] and putting CFPB-2014-0033 AND/OR RIN 3170-AA49 in the subject line of the email. The amendments were reportedly conceived based on feedback received from mortgage servicers. According to a report from JD Supra, more than 40 comments had been submitted as of February 17.