St Casimirs Mortgage Minute

Some Mortgage Servicers Break U.S. Rules, Mostly Due to Technology: Consumer Bureau

The Consumer Financial Protection Bureau (CFPB) issued a report on June 22 revealing that some mortgage services fail to follow federal rules intended to help borrowers avoid foreclosure, mainly due to the use of faulty technology. According to the report, some servicers are giving homeowners wrong or outdated information or no information at all. CFPB examiners found misrepresentations of terms, fees, and deadlines for loans and modifications in recent communications from servicers, and some borrowers were not told they could appeal denials. The report does not name the servicers or provide statistics on the prevalence of rulebreaking, but it indicates that loss mitigation and transfers were the main problem areas. "Mortgage servicers can't hide behind their bad computer systems or outdated technology. There are no excuses for not following federal rules," said CFPB Director Richard Cordray. The CFPB will seek "specific and credible plans" from servicers as to how they will improve their technology and fix problems identified by examiners. However, the report indicates that some of the failures identified by CFPB examiners have been remedied.

From "Some Mortgage Servicers Break U.S. Rules, Mostly Due to Technology: Consumer Bureau"
Reuters (06/22/16) Lambert, Lisa