CFPB Slams Mortgage Servicers Over 'Sloppy' Tactics

August 22, 2013
American Banker  
mortgage lending news

Mortgage servicing issues persist, despite a renewed focus on these problems in the wake of the foreclosure crisis, finds a report issued Aug. 21 by the Consumer Financial Protection Bureau. Based on exams conducted between November and June, the agency specifically cited "sloppy" and "poor" practices related to mortgage transfers, payment processing, and loss mitigation procedures.

Although most of the scrutiny so far has been aimed at bank-owned mortgage servicers -- the largest of which have signed settlement agreements pledging to improve their systems -- the report said nonbank servicers also lacked adequate compliance management systems. In cases where mortgage servicing issues were documented, CFPB examiners directed the company how to remedy the problems. "CFPB's corrective measures included making sure that important papers were filed appropriately, that servicers improved their policies and procedures governing the handling of loans in loss mitigation, and that consumers were treated according to the law," read a press release from agency director Richard Cordray.

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