Servicing issues with loan modifications, foreclosures, and payment processing have persisted even after new standards were put in place last year, says the Consumer Financial Protection Bureau.
Between July and October 2013, financial firms paid $2.6 million to resolve existing issues with mortgage servicing practices. "Especially under the detailed protections of our new rules, we expect servicers to clean up their act and provide responsible customer service," said CFPB director Richard Cordray.
Some servicers are still failing to honor existing or permanent loan modifications after boarding the loans, which has led to wrong loan amounts charged to borrowers. Some also required borrowers to waive existing claims against the firms in order to obtain loan workouts or forbearances. Other issues deal with loan payment processing and incorrect data reporting to the credit bureaus.