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CFPB REPORTS HIGHLIGHTS "UNFAIR,
DECPTIVE" SERVICING PRACTICES IN 2013
e Consumer Financial Protection Bureau
(CFPB) released a report detailing a number of
shoddy servicing practices that "continued to
plague consumers throughout 2013."
e CFPB's latest Supervisory Highlights
report covers supervision work completed
between July and October 2013—after its
servicing rules were first published but before
they actually went into effect. e bureau said
it uncovered a number of "unfair and deceptive
practices" in that time.
"Problems in
mortgage servicing
have plagued
consumers for years
and helped contribute
to the financial crisis,"
said CFPB director
Richard Cordray.
"Taking action against
mortgage servicing
practices that harm
consumers is a key
priority for the CFPB.
Especially under
the detailed protections of our new rules, we
expect services to clean up their act and provide
responsible customer service."
Among the findings, e CFPB said its
examiners found two servicers were requiring
borrowers to waive existing claims in order
to get a forbearance or a loan modification
agreement. According to the agency, the
examiners found the waiver clauses too broad
and "unfair as they were done without regard
to individual circumstances." Examiners also
reportedly found two servicers engaging in
unfair practices by failing to honor existing
loan modifications after a servicing transfer.
In addition, the bureau said its supervisory
efforts revealed two cases of poor payment
processing: one in which a servicer
misrepresented payment plans in its marketing
and another in which a servicer falsely told
borrowers they would receive refunds from their
escrow accounts.
Finally, examiners also found several cases in
which servicers provided incorrect information
to consumer reporting agencies by misreporting
short sales as foreclosures.
In all problem cases, the CFPB said
the companies were alerted to the agency's
concerns, with investigations for potential
enforcement actions being launched when
appropriate.
In the July-October period last year, the
bureau said non-public supervisory actions and
self-reported violations resulted in $2.6 million in
remediation to consumers.
