The Consumer Financial Protection Bureau issued a warning Monday for all mortgage servicers—banks and non-banks—regarding the transfer of loans between servicers.
Servicers must not lose documentation, loss mitigation plans or interfere with a homeowner’s opportunity to save his or her home from unnecessary foreclosure, the CFPB states in new guidance released Monday, citing the high number and size of servicing transfers having taken place recently.
“Consumers should not be collateral damage in the mortgage servicing transfer process,” said CFPB Director Richard Cordray. “This guidance directs all mortgage servicers, both banks and nonbanks, to follow the laws protecting borrowers from the risks of such transfers, and makes clear that we will be monitoring them for compliance.”
The agency notes a “significant” number of servicing complications of late given the number of servicing transfers that have taken place in the past year. Some servicers have transferred troubled loans to more specialized servicers, the CFPB said in the warning, which it says should serve as a reminder to the risks such transfers can present to consumers.
View the guidance.
Written by Elizabeth Ecker