Recently, the Consumer Financial Protection Bureau (“CFPB”) issued a bulletin regarding the obligations of mortgage companies to protect consumers before, during, and following loan transfers between mortgage servicers. The preface to the bulletin states that the “CFPB’s concern in this area remains heightened due to the continuing high volume of servicing transfers.” Institutions that hold and service their loans do not have the same concerns as larger mortgage companies that do not service any of their loans; however, your organization should review the bulletin and evaluate any additional obligations.
The new bulletin replaces the original guidance regarding mortgage servicing transfers, and it adds two new components. The first new section, titled, “General Transfer-Related Policies and Procedures,” provides additional examples and discussion of what examiners will review when looking at loans that have been transferred and procedures that address this process. This includes a dialogue between the prior and subsequent servicers regarding any issues that a borrower raises about his or her loan.
A second new section, “Applicability of Other Parts of the New Servicing Rules to Transfers,” answers several common inquiries about how various sections of revised Regulation X impact transfers. This section of the bulletin is quite helpful to pinpoint certain requirements and ensure that your organization is complying with all relevant provisions.
Should you have any questions regarding this new guidance, please contact Spilman.