CFPB to crack down on mortgage servicers

by 10 Apr 2012

(CNNMoney) -- The Consumer Financial Protection Bureau announced Tuesday that it's considering new rules aimed at mortgage servicers to help protect consumers against "costly surprises."

The bureau's new rules will require servicers to issue mortgage statements that are more clear, as well as better disclosures about any fees or changes in a loan's interest rate.

"We want to make sure that at all times consumers know how much they owe, what they are paying, and how their payments are being applied," said Richard Cordray, director of the consumer bureau in a Tuesday speech.

This would be the federal government's first major move to crack down on the entire mortgage servicing industry, including big banks that service mortgages, since the housing bust and resulting financial crisis.

The new rules coincide with new standards set forth by a large settlement deal between states attorneys general and the five largest mortgage servicing banks. Those standards only impact the five largest banks and are aimed at halting robosigning and other improper foreclosure practices on homeowners who are late with payments.

The Consumer Financial Protection Bureau's rules would ask all servicers to ensure better transparency for all borrowers -- not just those whose loans are delinquent. The rules would take effect next January, according to the bureau.

Read full article from CNN Money



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