CFPB Mortgage Servicing Standards: Analysis for RESPA (Reg. X) and TILA (Reg, Z) final rules

February 2013
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CFPB Mortgage Servicing Standards: Analysis for RESPA (Reg. X) and TILA (Reg, Z) final rules

At a glance

The CFPB released the national servicing standards rules changing the mortgage servicing standards that apply under both the Real Estate Settlement Procedures Act (RESPA, Regulation X) and the Truth in Lending Act (TILA, Regulation Z) on January 17, 2013.

Since the Consumer Financial Protection Bureau (CFPB) first released its proposed national servicing standards for comment on August 9th of 2012, the mortgage servicing industry has been anxiously awaiting the release of the final rules. The CFPB released those rules January 17, 2013.

Those final rules change the mortgage servicing standards that apply under both the Real Estate Settlement Procedures Act (RESPA, Regulation X) and the Truth in Lending Act (TILA, Regulation Z), and the CFPB released the final rules under separate rulemaking notices for each. The combined set of final rules covers nine mortgage servicing areas. Small servicers (i.e., those that service 5,000 or fewer mortgage loans) are exempt from some of these requirements and have reduced requirements relative to larger servicers.

All of the final rules take effect from January 10, 2014, leaving a period of less than one year for mortgage servicers (and other impacted institutions such as creditors or assignees) to become fully compliant with the requirements.

Recognizing the context of significant regulatory change, this Point of View provides our insights into key provisions of the new servicing rules both under RESPA and under TILA, including the relationships between the final rules and the rules as proposed. We also provide our perspectives on the operational impacts servicers face integrating compliance with each new provision into their servicing operations.