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Wednesday, June 24, 2015

Servicing Rule Compliance Lapses Are Focus of CFPB Report

The Consumer Financial Protection Bureau yesterday issued a “Supervisory Highlights” report that outlined several areas of concern its examiners have found related to mortgage origination and servicing, fair lending and debt collection, among other topics.

The report devoted attention to several issues related to loss mitigation and foreclosure under the servicing rules. It discovered situations in which servicers sent inapplicable loss mitigation documents and failed to send necessary loss mitigation notices. It also said one servicer’s communications about how deferred loan payments worked was deceptive. At least one servicer sent notices of intent to foreclose to borrowers who had been approved for trial modification, while at least one other sent impending foreclosure notices to current borrowers.

Other lapses flagged by the CFPB include a failure to establish written policies on loan originator compensation, the distribution of incomplete lists of housing counselors and the provision of incomplete disclosures. The bureau also noted instances in which compliance management systems were insufficient to address the risk of violating debt collection rules.

Read the report.