CFPB Deputy Director Steve Antonakes, speaking at a Mortgage Bankers Association conference, said he was “deeply disappointed by the lack of progress the mortgage servicing industry has made.”
“My message to you today is a tough one,” Antonakes said. “I don't expect a standing ovation when I leave. But I do want you to understand our perspective.”
The CFPB had previously said it would be patient with servicing companies that made “a good-faith effort” to comply with regulations.
“A good-faith effort, however, does not mean servicers have the freedom to harm consumers. It has felt like ‘Groundhog Day’ with mortgage servicing for far too long,” Antonakes said. “…Business as usual has ended in mortgage servicing. ‘Groundhog Day’ is over.
“…Too many customers continue to receive erratic and unacceptable treatment,” he said. “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.”
Antonakes also said the CFPB would be keeping an eye on situations where servicing rights were transferred from one company to another.
“We expect you to pay exceptionally close attention to servicing transfers and understand we will as well … Servicing transfers where the new servicers are not honoring existing permanent or trial loan modifications will not be tolerated,” he said. “There will be no more shell games where the first servicer says the transfer ended all of its responsibility to consumers and the second servicer says it got a data dump missing critical documents.”
Antonakes also said industry regulation was a necessary evil because the industry had not regulated itself.
"Frankly, the notion that government intervention has been required to get the mortgage industry to perform basic functions correctly – like customer service and record keeping – is bizarre to me but, regrettably, necessary," he said. "...Please understand: if you choose to operate in this space, the fundamental rules have changed forever. It’s not just about collecting payments. It’s about recognizing that you must treat Americans who are struggling to pay their mortgages fairly before exercising your right to foreclose. We have raised the bar in favor of American consumers and we are ready, willing and able to vigorously enforce that bar."
The number-two man at the Consumer Financial Protection Bureau tore into the mortgage servicing industry this week, saying servicers are harming consumers.