The Consumer Financial Protection Bureau is proposing the following federal rules to be levied on the servicing divisions of lenders, to help struggling borrowers. A lot of this is commonsense, and being conducted by many loan servicers… but unfortunately some are not. Here’s an overview of the proposed rules slated to be in effect in January:
1) Require servicers to send clear mortgage statements to summarize the key terms of their loan…how much they owe, what they are paying, and how their payments are being applied.
2) If consumers fall behind on payments, have easy access to to their options.
3) Provide early warnings before adjustable rate mortgages change.
4) Have policies and procedures in place, provide accurate information and timely decisions on loan modifications (avoid runarounds).
5) Servicers would have to make sure that personnel who deal with borrowers have full access to customer documents so they can answer questions accurately and specify whether any documents are missing or incomplete.
6) Borrowers who are working in good faith to avoid foreclosure would no longer have to worry about their homes being sold out from under them without warning. When a borrower submits a timely and complete application to pursue other options, that would restrict a servicer’s ability to proceed with foreclosure unless the borrower is ineligible or fails to comply with the criteria.
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