CFPB national servicing standards proposal

September 2012
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CFPB national servicing standards proposal

At a glance

September 2012 - The Consumer Financial Protection Bureau (CFPB) released proposed national servicing standards for comment for the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

An analysis of the Consumer Financial Protection Bureau's proposed changes to the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA)

The National Mortgage Settlement (NMS) signed by the top five mortgage servicers and 49 state attorneys general and numerous federal agencies and the California Homeowners Bill of Rights have begun the ground work for what many regulators and politicians have been calling for: a set of national standards for mortgage servicers.

On August 9, 2012, the Consumer Financial Protection Bureau (CFPB) followed suit and released its proposed national servicing standards for comment. The proposed standards are divided into two separate proposals, one proposing amendments to Regulation X under the Real Estate Settlement Procedures Act (RESPA) and the other proposing amendments to Regulation Z under the Truth in Lending Act (TILA). The proposals cover the following nine aspects of mortgage servicing:

  • Periodic billing statements;
  • Adjustable-rate mortgage interest-rate adjustment notices;
  • Prompt payment crediting and payoff payments;
  • Force-placed insurance;
  • Error resolution and information requests;
  • Information management policies and procedures;
  • Early intervention with delinquent borrowers;
  • Continuity of contact with delinquent borrowers; and
  • Loss mitigation procedures.

This point of view summarizes and analyzes the key recommendations made within the proposal and highlights actions that should be considered in relation to these recommendations. It will help those in the industry and those related to it understand the contents of the proposal as well as provide an analysis of what the impacts of the proposal’s recommendations could be and how PwC can help you prepare for upcoming changes.