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CFPB 2015 Summer Highlights

This month, the Consumer Financial Protection Bureau (“CFBP”) issued its periodic Supervisory Highlights, which provides an overview of the CFPB’s recent observations in the consumer debt industry. In this month’s issue, the CFPB and its examiners found that “at least one” mortgage servicer failed to comply with Regulation X’s (12 C.F.R. 1024, et seq.) loss mitigation requirements. Specifically, the CFPB found that one or more mortgage servicers were sending loss mitigation acknowledgement notices “sometimes dozens in number, inapplicable to their circumstances and which it did not need to evaluate the borrower for loss mitigation.” The CFPB found that “one or more servicers failed to send any loss mitigation acknowledgment notices.” Additionally, the CFPB found deceptive practices related to the disclosed terms of payment plans and the transferring of mortgage servicing rights while borrowers were in the midst of seeking loss mitigation options. With respect to the foreclosure process, the CFPB found a least one servicer engaging in “dual tracking” whereby the mortgage servicer would approve a borrower for a trial modification and then send a notice of intent to foreclosure. The CFPB believes that a “reasonable borrower receiving one of these notices would be misled to think the servicer had abandoned the trial modification.”

Because of these findings, it is important for borrowers to understand their rights. If you believe that your mortgage servicer has not been forthcoming or complying with applicable regulations, contact an attorney for professional advice.

For the full version of the Summer 2015 Supervisory Highlights, visit this page: