DS News

DS News December 2022

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

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Page 77 of 99

76 76 76 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal CFPB CALLS OUT SERVICERS FOR VIOLATIONS OF THE FAIR CREDIT REPORTING ACT e Consumer Financial Protection Bureau (CFPB) has released its Fall 2022 new Supervi- sory Highlights report on legal violations iden- tified during the CFPB's supervisory examina- tions in the first half of 2022. e report details key findings across consumer financial products and services, including how consumer reporting companies and data furnishers continued to vi- olate the Fair Credit Reporting Act (FCRA) by failing to promptly address, and update incorrect information on credit reports. Prominent in the CFPB's report are instanc- es where mortgage servicers charged impermis- sible fees when homeowners went to make their mortgage payments. "e CFPB's supervision efforts limit the spread of potentially unlawful practices and consumer harm," CFPB Director Rohit Chopra said. "e CFPB's examination program con- tinues to identify problematic practices and stop them before they spread." Highlighted in the report was the CFPB's examination of mortgage servicers in violation of federal law by charging sizable phone payment fees—even though consumers were not made aware of these pay-by-phone penalties. During calls with borrowers, customer service represen- tatives did not disclose the existence or cost of fees for paying over the phone, yet the borrowers were charged fees anyway. Following these findings, the CFPB required the servicers to re- imburse all borrowers who paid phone payment fees when those fees were not properly disclosed. In some cases, servicers charged consumers $15 fees for making payments by phone with customer service representatives. e CFPB has been focusing on the practice of charging "pay-to-pay" junk fees. Earlier this year, a CFPB advisory opinion affirmed that federal consumer financial protection law often prohibits companies considered debt collectors under the Fair Debt Collection Practices Act from charging "convenience fees" to pay down a balance. CFPB examiners also found that mortgage servicers unfairly charged some consumers fees while they were in CARES Act forbearances or failed to maintain policies and procedures reasonably designed to properly evaluate loss mitigation options. Section 4022 of the CARES Act prohibits a mortgage servicer from imposing "fees, penalties, or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract" on consumers receiving a CARES Act forbearance. CFPB examiners also found that one or more of the nationwide consumer reporting companies failed to report to the CFPB the outcome of their reviews of complaints about inaccuracies on consumers' credit reports. In response to these findings, consumer-reporting companies changed their policies, procedures,

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