The Consumer Financial Protection Bureau (CFPB) has issued a bulletin advising mortgage companies about their legal obligations to protect consumers during loan transfers between mortgage servicers. The agency says that it is issuing this bulletin due to its ‘heightened concern about these practices, given the large number and size of recent servicing transfers.’
With this new bulletin, the CFPB says that it will be focusing on how servicers prepared for the transfer of servicing rights or responsibilities, how a new servicer handles the files it receives through a transfer and what policies the servicers have to prevent borrower harm for loans with loss mitigations in process.
‘Consumers should not be collateral damage in the mortgage servicing transfer process,’ says CFPB Director Richard Cordray. ‘This guidance directs all mortgage servicers, both banks and nonbanks, to follow the laws protecting borrowers from the risks of such transfers and makes clear that we will be monitoring them for compliance.’
The CFPB bulletin is available online.