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70 consideration as servicers absorb the numerous announcements the CFPB has made this year, ones that potentially will have a severe impact on business. e reality is that more complex requirements will further stress resources that are already strained. For example, as things stand now, staff training for servicers will grow more cumbersome as some employees return to the office while others work permanently from home. We will also see servicing systems being taxed by temporary pandemic regulatory and guideline changes and permanent industry updates. Another ongoing issue impacted by the pandemic is compliance with Regulation X of the Real Estate Settlement Procedures Act (RESPA). e MBA and the NMSA collectively reached out to Uejio in reply to proposed rules to amend Regulation X. While acknowledging industry's support for the CFPB's proposed rulings, again the groups called out areas that need clarification. For servicers, changes of this magnitude can create both timing and monetary constraints. For instance, new rules and guidelines will require extensive follow-up to ensure they are implemented properly and to ensure adherence to new compliance processes. Some servicers simply won't be prepared to integrate proposed CFPB rules and mandates effectively. More importantly, some may not be able to stand up to increased agency scrutiny, which could place them at risk of a fine or other enforcement action. MORE CHANGES ARE ON THE WAY Remarkably, mortgage servicers, which are the focus of the CFPB's recommended changes, have done an admirable job in addressing borrower needs as they handled nearly 4.3 million in pandemic forbearances. In fact, in their comment letter to the CFPB, the NMSA, and MBA pointed out that, even though the CFPB reported a 54% increase in year-over-year complaints (2019 to 2020), mortgage servicers experienced a decline. is brings into question the CFPB's forthcoming debt collection rule, which is partially founded on complaint data. e mortgage servicing industry and the CFPB mutually agree that the job of supporting homeowners financially impacted by COVID-19 is far from over. However, some of the CFPB's proposed rulings overlook and overlap existing servicer practices. e joint comment letter pointed out some of these gaps. For example, the groups said the CFPB's failure to augment and clarify the scope of its streamlined modification exemptions could frustrate the agency's goal of reducing hurdles for borrowers who enter permanent loan modifications. In fact, it could further impair consumer access to this option. In another example, the proposed communication guidance for borrowers nearing the end of their forbearance plans duplicates existing processes required by the government-sponsored enterprises (GSEs) and investors. e CFPB is making a valid effort to address real concerns that homeowners financially impacted by the COVID-19 pandemic have. However, each rulemaking scenario creates a near-term response on behalf of mortgage servicers to digest, educate, and properly implement new or changed processes, which will disrupt their ability to support distressed homeowners. e CFPB has also sent servicers a clear signal that debt collection will be among the agency's priorities. e agency's annual report to Congress on the Fair Debt Collection Practices Act (FDCPA), a joint effort on the part of the CFPB and the Federal Trade Commission, insinuated that the industry should expect examinations to resume full- force with a strong focus on the fair treatment of consumers who have been impacted by COVID-19. SERVICERS HAVE BEEN WARNED Regulators are also paying closer attention to consumer complaints, which Uejio states represent "an important real-time window into where consumers encounter problems in the marketplace." With complaints on the rise during the pandemic, increasing over 50% since 2019, the CFPB used a keyword search to highlight the frequency of the COVID-19's impact on consumers. e other most prevalent area of concern revolved around credit reporting, which has been an ongoing subject of consumer complaints spanning several years. e CFPB is also continuing to warn servicers to prepare for the possibility of increasing foreclosure risk. Concerned over the potential volume of foreclosures that could hit the industry as early as this fall, Uejio has cautioned servicers to incorporate preventative measures now. It's been made The mortgage servicing industry and the CFPB mutually agree that the job of supporting homeowners financially impacted by COVID-19 is far from over. However, some of the CFPB's proposed rulings overlook and overlap existing servicer practices. Feature By: Jane Mason

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