CFPB Releases Mortgage Servicing Oversight Manual, Starts Immediately

Oversight of mortgage servicers is under way by the new Consumer Financial Protection Bureau, launched on July 21. Under Dodd-Frank, the CFPB will follow its Mortgage Servicing Oversight Manual, released today as part of a larger supervision manual it will use to enforce consumer financial protection today and in the years to come.

The manual specifies policies and procedures for the bureau’s examiners, which now number roughly 300 across all sectors, and includes procedures for examining routine servicing, default servicing and foreclosures.

Regulations under Dodd-Frank including The Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA) and its implementing regulation, Regulation Z, among others, are covered in the manual. The CFPB says it has begun conducting examinations of mortgage servicers and that it is a significant focus and initiative of the bureau, including homeowners who have gone through and are currently going through the foreclosure process.


Penalties for violations will range from recommendations to fines, depending on the issues and specific findings, a senior CFPB official told reporters today in a conference call.

Written by Elizabeth Ecker

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  • I have been skimming over the manual. It is a large one and with a lot of rules of enforcement. Some areas seem to be good moves on their part. However, it appears there are many areas of the manual that give a tremendous amount of authority by the CFPB over the financial institution world! In short, the manual scares me so far. Not only do you need your compliance department and your attorney’s to review everything in detail but all who are in the lending and financial arena need to be aware of the rules, the new compliance requirements and the consequences! I feel we are being trapped in an industry (The financial industry as a whole) that will cause us to violate the rules because we have so many of them and so many of them are so ambiguous! John A. Smaldone

  • Bureaucratic hypocrisy is now in full display.  
    The two documents make it clearer now than ever that the propaganda tour Ms. Warren took on late night and comedy shows was nothing more than her way to avoid difficult questions and to avoid providing full and complete disclosure.  She claimed that those who do not support the bureau are those who oppose clear, truthful, and comparative lending documents.  She has her nerve.
    To a great extent all the bureau is a new governing body with duplicative functions.  The clarity and ease of reading the two new documents is worse than any loan documents produced in the last quarter century.  When it comes to law, referencing other laws is understandable.  When it comes to a manual interpretative, direction is expected but in these two documents seems more happenstance than intended.
    It seems this bureau believes one set of rules regarding transparency and comparability should apply to lenders and another to the bureau.

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