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Washington
Change is coming, CFPB's Antonakes warns mortgage servicers
WASHINGTON (2/20/14)--Quick action will be taken against mortgage servicers that fail to properly notify homeowners when their loans are sold to other parties, or otherwise fail to follow new servicing regulations, Consumer Financial Protection Bureau Deputy Director Steve Antonakes said Wednesday.

Antonakes' remarks were made before the Mortgage Bankers Association's national mortgage servicing conference.

The CFPB has said it will not punish good-faith efforts to comply with new mortgage servicing rules. However, Antonakes warned that this leeway will only extend so far. "A good faith effort...does not mean servicers have the freedom to harm consumers," he said. The regulator said new servicers will need to honor existing loan modifications, whether they are trial or permanent modifications. So-called "shell games" will not be tolerated, he added.

"Affected credit unions are working hard to comply with CFPB rules and we are not aware of credit union servicers trying to dodge their legal requirements under the CFPB's servicing rule," Credit Union National Association Deputy General Counsel Mary Dunn said. "We have sought clarification from the CFPB that credit unions are not particular targets," she added.

Antonakes did not mention credit union mortgage servicing in his remarks.

New CFPB mortgage servicing rules, which went into effect on Jan. 10, require servicers to:
  • Maintain accurate records;
  • Give troubled borrowers direct and ongoing access to servicing personnel;
  • Promptly credit payments; and
  • Correct errors on request.
The rules also include new, stronger protections for struggling homeowners, including those facing foreclosure.

Overall, Antonakes said, he is "deeply disappointed by the lack of progress the mortgage servicing industry has made" in dealing with many market issues. "Too many customers continue to receive erratic and unacceptable treatment" from mortgage servicers, he added.

A New York Times DealBook blog post reported that homeowners are again starting to have issues with their servicers, with some consumers reporting specialty mortgage servicers levying incorrect fees, fast-tracking paperwork and wrongfully evicting some mortgageholders. Certain servicers are slow to upgrade their infrastructure, leading to unimpressive results, while others may be processing troubled mortgages quickly to collect their fees, DealBook reported.

"Our nation's mortgage servicers manage a debt portfolio of nearly $10 trillion for millions of American homeowners. This kind of continued sloppiness is difficult to comprehend and not acceptable. It is time for the paper chase to end," Antonakes said.
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