Officials from the Consumer Financial Protection Bureau (CFPB) spoke to attendees from all sectors of the mortgage industry at the Consumer Financial Protection Bureau Industry and Servicer Training Update during the 2016 Five Star Conference and Expo. Laurie Maggiano, Manager for Servicing and Securitization Markets, Research, and Regulation, and Laura Johnson, Senior Counsel in the Office of Regulations led this training update. Maggiano and Johnson presented an overview of policy and programs that impact the mortgage industry based off of the recently published rules in August. This was one of the first times the Bureau has provided an in-depth, in-person training since the promulgation of the new servicing rules.
The finalized rules dictate that servicers must provide certain borrowers with foreclosure protections more than once over the life of the loan. According to the CFPB, this change will be particularly helpful for borrowers who obtain a permanent loan modification and later suffer an unrelated hardship, such as the loss of a job or the death of a family member, that could otherwise cause them to face foreclosure.
Servicers must also clarify borrower protections when the servicing of a loan is transferred and provide important loan information to borrowers in bankruptcy.
The updated rules also more clearly define various roles in the foreclosure process. For those who inherit property, the potential foreclosure process has been especially perilous. The updated rules establish a broad definition of “successor in interest” that generally includes persons who receive property upon the death of a relative or joint tenant, via divorce or legal separation, through certain trusts, or from a spouse or parent and gives them, generally, the same protections outlined under the CFPB’s mortgage servicing rules as the original borrower.
These amendments also require servicers to notify borrowers when loss mitigation applications are complete and provide greater protection for struggling borrowers during servicing transfers. The rules also clarify servicers’ obligations to avoid dual-tracking and prevent wrongful foreclosures, as well as when a borrower becomes delinquent.
To view the presentation material from the CFPB Industry and Servicer Training Update click HERE.
To read more about the CFPB’s updated rules click HERE.
Editor's note: The Five Star Institute is the parent company of DS News and DSNews.com.