The Consumer Financial Protection Bureau (CFPB) announced today two sets of proposed rules intended to enhance consumer protections with regard to the process for “evaluating consumers for alternatives to foreclosure” and to “lessen potential burdens on small servicers,” according to a press release from the bureau. The proposed rules are in response to complaints of mortgage servicers losing applications and paperwork, and making it exceptionally difficult to correct errors when they do arise, the release said.
The first set of proposed rules aims to help consumers avoid costly surprises by providing them with “clear and timely information about their mortgages,” the release said. Those rules include: clear monthly mortgage statements; warnings before interest rates adjust; options for avoiding costly “force-placed” insurance; and early information and options for avoiding foreclosure. The second set of rules would dictate “requirements for handling consumer accounts, correcting errors, and evaluating borrowers for options to avoid foreclosure,” the release said. Those rules include: payments promptly credited; maintenance of accurate and accessible documents and information; errors corrected quickly; direct and ongoing access to servicer personnel to assist delinquent borrowers; and evaluation of borrowers for options to avoid foreclosure.
For more information on the proposed rules, read the press release.