WASHINGTON – The Consumer Financial Protection Bureau has issued a proposal that would require mortgage servicers to provide clear monthly statements, earlier disclosures for interest rate adjustments, and options to help borrowers avoid foreclosures and costly force-placed insurance.
The plan, which must be finalized by January 2013, among other provisions would force servicers to immediately credit payments to consumers’ accounts and provide troubled borrowers with direct access to foreclosure prevention programs. The proposal does not deviate substantially from details the CFPB released in April about how it planned to revamp mortgage servicing.
The agency did make small adjustments, however. It gave an exemption to small servicers that handle fewer than 1,000 loans from sending periodic billing statements to borrowers with a breakdown of terms and fees. CFPB officials said the agency is considering whether to exempt small servicers from other aspects of the proposed rules.
Some of the criticisms of the proposal have included its requirement to provide earlier disclosures on ARMs, including having to provide a notice to borrowers as early as seven or eight months before the first interest rate adjustment.
“We will be taking a very close look at these proposals over the next few weeks,” said CUNA President Bill Cheney. “In a quick review, we have already identified a number of problem issues and concerns, and will be working with various key committees and member contacts within the association to determine how we can address those concerns and issues.”