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CFPB issues bulletin to prevent runarounds in mortgage servicing transfers

Aug 25, 2014
The Consumer Financial Protection Bureau (CFPB) recently released a bulletin outlining expectations for mortgage servicers that transfer loans. The bulletin includes information on how mortgage servicers should pay special attention to new rules protecting consumers applying for loss mitigation help or trial modifications.

In January 2014, the CFPB’s new common-sense mortgage servicing rules took effect. The rules protect mortgage borrowers from runarounds by their servicers. Servicers are now required, for example, to maintain accurate records, promptly credit payments, and correct errors on request. Among other things, the new regulations also require servicers to maintain policies and procedures to facilitate the handover of information when a servicer transfers a loan to a new company.

This recent bulletin gives examples of some things CFPB examiners will look for when loans are transferred. In particular, CFPB examiners will carefully scrutinize transfers of loans with pending loss mitigation applications or approved trial and permanent modification plans. Examples of good practices by servicers include flagging those loans and taking special care to ensure that all relevant documents are transferred in a timely manner.

If servicers are not fulfilling their obligations under the law, the CFPB will take appropriate actions to address these violations and seek all appropriate corrective measures, including remediation to harmed consumers.

To read the bulletin released by the CFPB, click here.
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