by Donald C. Lampe, Jeffrey E. Jamison,
and Michael B.
On Dec. 17, the Consumer Financial Protection Bureau (CFPB) issued the expected mortgage servicing final
rules. At over 1,000 pages, the final rules will amend the Truth in
Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act
(Regulation X). Consistent with the Bureau's proposal, the rules cover nine
major topics and implement the mortgage servicing provisions of Title XIV
of the Dodd-Frank Act. The rules, which will take effect on January 10,
2014, directly implement Congressionally-mandated servicing reforms but also
include a host of required loss mitigation rules and processes. The CFPB
promulgated these latter rules by way of its general rulemaking authority
under RESPA provided in the Dodd-Frank Act, not pursuant to specific Dodd-Frank
statutory provisions. In prepared remarks for today's field hearing in Atlanta,
CFPB Director Cordray emphasized that these new rules are not only
mandatory for mortgage servicers (with limited exceptions for smaller
servicers), but "are backed by the full supervisory and enforcement authority
that Congress has conferred upon [the CFPB]."
According to Director Cordray, the CFPB's new mortgage
servicing rules were designed to resolve sub-standard mortgage servicing
practices by achieving two main objectives. "First, they will help
prevent all borrowers from being caught off guard by surprises and getting the
runaround from their servicers. Second, there are special protections for
borrowers who are having trouble making their mortgage payments."
The new rules set forth the following regulations and
FOR ALL BORROWERS
Read more articles about the Consumer Financial Protection
Bureau at Dykema's CFPB Blog
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