Compliance Alert: Consumer Financial Protection Bureau Discusses Expectations for Servicers
On April 7, 2021, the Consumer Financial Protection Bureau (Bureau) published a bulletin to discuss its supervision and enforcement priorities for mortgage servicing. 86 Federal Register 17897 (April 7, 2021). Because many borrowers will be facing the end of forbearance periods in the coming months and foreclosure moratoriums are expected to end, the Bureau announced that, in supervising servicers, it will focus on the following concerns:
- Contacting borrowers in forbearance: The Bureau will monitor whether servicers contact borrowers in forbearance before the end of the forbearance period about their loss mitigation options.
- Outreach to borrowers: The Bureau will monitor whether servicers are ensuring that borrowers have necessary information needed to evaluate them for payment assistance.
- Addressing language access: The Bureau will examine whether servicers are managing communications with borrowers with limited English proficiency pursuant to the Equal Credit Opportunity Act (ECOA)’s prohibition against discrimination.
- Evaluating income fairly: The Bureau will examine, in determining eligibility for loss mitigation options, whether servicers evaluated borrowers’ income from public assistance, child support, and alimony, in accordance with ECOA, to the extent the servicer is otherwise required to use income in determining eligibility for loss mitigation options.
- Service times: The Bureau will examine whether borrower inquiries are handled promptly and that hold times do not exceed industry averages.
- Preventing avoidable foreclosures: The Bureau will examine whether servicers are complying with foreclosure restrictions in Regulation X and other applicable laws.
- Credit reporting: The Bureau will focus on whether servicers are complying with the requirements in the Fair Credit Reporting Act to furnish information to the credit bureaus appropriately.
The bulletin became effective on April 7, 2021.