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Bureau proposes borrower protection rules
Rules that would set standards to prevent mortgage servicer errors and surprises were proposed Friday by the U.S. Consumer Financial Protection Bureau.
“Millions of homeowners are struggling to pay their mortgages, often through no fault of their own,” Bureau Director Richard Cordray said in a release. “These proposed rules would offer consumers basic protections and put the ‘service’ back into mortgage servicing. The goal is to prevent mortgage servicers from giving their customers unwelcome surprises and run-arounds.”
The first set of proposed rules would provide consumers with clear, timely information about their mortgages so they can avoid costly surprises, the federal agency said, providing greater transparency. Among other things they would require mortgage services to provide clear monthly mortgage statements, warnings before interest rate adjustments, and early information and options to avoid foreclosure.
The second set of proposed rules would impose “common-sense requirements” for handling consumer accounts, correcting errors and evaluating borrowers for options to avoid foreclosure, the bureau said.
The proposed rules would direct servicers to ensure mortgage payments are properly posted, maintain accurate and accessible information and documents, correct errors quickly, provide access to personnel to help delinquent borrowers and evaluate borrowers for options to avoid foreclosure.
The public has until Oct. 9 to review and provide comments on the proposed rules. The bureau will review and analyze the comments before issuing final rules in January 2013.
Copyright 2012 by United Press International