The Consumer Financial Protection Bureau (CFPB) has recently disclosed final rules aiming at those companies that deal with mortgage payments. These rules are intended to disclose cost and bring relief to deal with struggling home owners. This is a result of the financial crisis and abuses revealed in the past. Consumer advocates as well as mortgage industry lobbyist bargain hard for their clients before the announcement of new rules. According to new rules, mortgage servicers must provide the following information.
- Companies that collect borrower’s funds on behalf of loan owners must provide regular statements including principal, interest, fees, and escrow components.
- Warn borrowers before any interest rate changes such as on those adjustable-rate mortgages and other actions.
- New rules prohibit starting any foreclosure proceedings on borrowers who have already applied for an alternative solutions such as a loan modification and when that application is pending. This is known as “dual tracking.”
- Servicers must wait until a mortgage account is more than 120 days delinquent before making a filing of first foreclosure process notice and other actions.
- Small servicers, those companies handling less than 5,000 mortgages, are exempt from certain requirements.
- New rules will take effect on January 2014.