Groundhog Day is over, a top Consumer Financial Protection Bureau executive told the Mortgage Bankers Association in a Wednesday speech regarding mortgage servicing practices that are harmful to consumers.
CFPB Deputy Director Steven Antonakes’ remarks follow the New York Department of Financial Services’ recent announcement of its intentions to crack down on badly-behaving mortgage servicers. Regulatory scrutiny of the mortgage servicing industry has intensified recently, especially relevant in light of the recent trend of non-bank entities buying up mortgage servicing rights.
New rules issued by the CFPB for servicers relating to foreclosure procedures, communication with consumers, payment applications, and interest rate changes have been in effect since January, Antonakes noted in a speech given to MBA conference attendees.
“What we are requiring of servicers are the kind of basic practices of customer service that should have been implemented long ago. We have said that in the early months we will look to see that those subject to the rules have made a good faith effort to comply,” he said. “A good faith effort, however, does not mean servicers have the freedom to harm consumers. It has felt like ‘Groundhog Day’ with mortgage servicing for far too long.”
Servicers have had more than a year now to work on implementation, he said, and the CFPB intends to end a “failed process” that has kept struggling homeowners in the dark about where they stand with their servicer.
“Our new mortgage servicing rules are now subject to federal supervision and enforcement across the entire marketplace. Mortgage servicing rule compliance is a significant priority for the Bureau,” Antonakes said in his remarks. “Accordingly, we will be vigilant about overseeing and enforcing these rules.”
The CFPB deputy director emphasized that the rules of mortgage servicing have “changed forever”—the industry isn’t just about collecting payments, it’s about fair treatment of American consumers with mortgages.
“Ultimately, these profound changes will be good for all Americans,” he said. “But please understand, business as usual has ended in mortgage servicing. Groundhog Day is over.”
Written by Alyssa Gerace