The Consumer Financial Protection Bureau’s Deputy Director Steven Antonakes said that the agency will start to crack down on mortgage servicers that are in violation of new rules that went into effect Jan. 10, noting that they had a year to prepare for changes, National Mortgage News reported Feb. 19.
Speaking at the Mortgage Bankers Association’s National Mortgage Servicing Conference in Orlando, Fla., Antonakes told servicers that “a good faith effort” to follow new rules “does not mean servicers have the freedom to harm consumers,” National Mortgage News reported.
“My message to you today is a tough one,” he said, National Mortgage News reported. “Servicers have had more than a year now to work on implementation. We put out plain-language summaries of the rules and posted video guidance … in addition, as we became aware of critical operational or interpretive issues with our rules, we addressed them.”
Antonakes noted that the servicing industry still suffers from rampant complaints ranging from poor documentation practices to wrongful foreclosures. He noted that one in 10 homeowners remains underwater on their mortgage and around two million households still are at risk of foreclosure.
While Antonakes acknowledged that 6.8 million loans have been modified since 2007, he said customer service overall remains poor. “Our nation's mortgage servicers manage a debt portfolio of nearly $10 trillion for millions of American homeowners. This kind of continued sloppiness is difficult to comprehend and not acceptable. It is time for the paper chase to end,” National Mortgage News reported.
The new mortgage servicing rules require clearer monthly statements and stricter timelines in responding to borrowers, as well as a ban on dual tracking loan modifications and foreclosure procedures and on the use of force-placed insurance as a regular practice rather than a last resort.
Antonakes also noted that the CFPB would not tolerate “servicing transfers where the new servicers are not honoring existing permanent or trial loan modifications.” National Mortgage News reported.