Report: ‘Sloppy’ Mortgage Services Trip up Borrowers
August 27, 2013
Home owners continue to face hassles with mortgages, particularly from servicers who are “sloppy” about transferring paperwork when loans are sold, misapplying payments, and who occasionally cause home owners to pay their property taxes late, according to a new report by the Consumer Financial Protection Bureau.
“Today’s report highlights both the mortgage servicing problems throughout the industry, and the challenges of making sure that nonbanks are following federal law,” says Richard Cordray, CFPB’s director. “Fixing both is a priority for us.” The CFPB is in charge of regulating the mortgage servicer marketplace.
The report included such stories as a mortgage servicer who delayed property tax payments from December to January for thousands of borrowers, without informing them. The borrowers were then forced to miss out on the federal tax deduction. The CFPB is requiring the servicer to compensate the borrowers.
The report also highlighted excessive delays in processing borrowers’ requests for private mortgage insurance cancellation.
The CFPB is notifying mortgage servicers that they must comply with several new servicing rules that go into effect in January, including a warning of when interest rates will reset on a loan and if they’re at risk of foreclosure. See a summary of the new rules at the CFPB Web site.
Source: “Homeowners Still Hurt by 'Sloppy' Service on Mortgages, Feds Say,” Credit.com (Aug. 26, 2013) and Consumer Financial Protection Bureau
Updated: June 20, 2018