Mortgage Servicers Scolded Directly by CFPB Deputy Director
General sessions at the National Mortgage Service Conference & Expo are expected to be benign, somewhat stuffy affairs, where bankers can rub elbows and pat one another on the back.
This year, however, the Mortgage Banker’s Association got a shock when the deputy director of the Consumer Financial Protection Bureau slapped them with this: “Nearly eight years have passed, and I remain deeply disappointed by the lack of progress the mortgage servicing industry has made.”
Our Miami foreclosure lawyers know that such straight talk directly to industry insiders at the Orlando conference came as somewhat of a shock.
Still, it shouldn’t be any big secret that the housing market stability advances stemming from mortgage service industry insiders has been woefully lacking. We have an economy that’s growing. We have unemployment that’s decreasing. And yet, homeowners are continuing to struggle.
In fact, 1 out of every 10 homeowners is still underwater. Some 2 million remain at high risk of having their homes foreclosed upon.
While the agency’s director, Richard Corday, has been forthright in voicing similar concerns and stressing the need for mortgage industry compliance with new standards, he has rarely been as harsh as his deputy director, Steven Antonakes, at the national expo.
Antonakes pointed out that the mortgage servicing industry has had more than one year to work on implementation of the new national standards, which were generated after the previous lack of standards led the housing market crash. Banks got rich pushing high-interest loans onto buyers that couldn’t afford them and then bundling those risky loans to sell to unsuspecting investors. Mortgage servicers then cranked out foreclosures with flimsy proof. In some cases, records were outright falsified, and the market was left in shambles.
In his speech, Antonakes indicated that in trying to get companies to adhere to new compliance standards, plain language summaries, in the form of both printed word and simple videos, were provided to servicing firms. Readiness guides were issued. The CFPB and other regulators developed inter-agency procedures that would make it clear to firms what was expected of them. And in fact, what’s really expected of them isn’t even perfection, he said, but at least a good faith effort.
And yet, the industry continues to drag its feet in even meeting the most basic requirements.
Antonakes told the group that they could not continue on with business as usual, and at some point, the government would be forced to intervene.
He said that while some firms should be commended for the millions of dollars and countless hours spent preparing their company practices to be in line with the new rules, there are far more who have not done little.
He indicated his agency would be paying “exceptionally close attention” in the coming months to compliance among mortgage servicing firms. Those that are found lacking will face sanctions, he vowed.
Among the new rules:
- Provide clear monthly statements;
- Promptly fix mistakes;
- Credit accounts with payments on the same day they are received;
- Offer early notice if the adjustable rate mortgage and interest is about to change;
- Offer more help to borrowers who are falling behind on payments;
- No more dual-track foreclosures, in which foreclosures are processed at the same time homeowners are seeking help with their loan;
- Provide homeowners with prompt, accurate information about their foreclosure status when requested.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.