Real Estate News

CFPB announces plan to review mortgage rule

Published: 08 May 2017

Four years after it first appeared, the Consumer Financial Protection Bureau is taking a closer look at a rule that could affect borrowers. According to a press statement from May 4, the organization wants to review the mortgage servicing rule of the Real Estate Settlement Procedures Act, which has granted certain protections to those with mortgage loans since it took effect in 2014.

Now, the CFPB is looking for public input as it decides what amendments are needed on a timeframe that ends 60 days after the assessment plan's publication. This comes from a Dodd-Frank Wall Street Reform and Consumer Protection Act requirement to conduct reviews in the five-year period after enacting a rule. This particular existing regulation already concerns the way servicers interact with borrowers, hopefully making the priority better, consumer-friendly service.

In its official request for information on the possible assessment, the Bureau outlined some of the areas the initial servicing rule impacted, including resolving errors and responding to delinquent borrowers.

The rule also put specific practices into place regarding what servicers could do to mitigate a loss, such as evaluating the borrower within 30 days and waiting until after 120 days to enact certain processes.

To see the true effectiveness of the measure, the Bureau plans to judge the results of the initial amendment against a sort of imagined control group, theoretically making the actual real-world results easier to identify.

In addition to simply seeking feedback, the Bureau said that it would also welcome suggestions for possible data sources as a way to address challenges. The commenting period is, along the same lines, open not just to general consumers but members of the industry as well, including the mortgage loan servicers the rule chiefly affects.