U.S. Regulator Adjustment of Time Requirements in Mortgage Services

Policies for mortgage services have eased off their time requirements in communication which would help borrowers who are having a hard time in coping with the new rules implements later this month in order to avoid unwarranted home foreclosures.

According to the Consumer Financial Protection Bureau, the servicers will be required to give appropriate mortgage payments to striving borrowers regards to customer's bankruptcy information and possible interventions. This was introduced last year. However, servicers were baffled regarding the frequency of sending their intervention notices who has requested for a limited contact from companies under the Fair Debt Collection Practices Act. Concerns were raised on how to deal with this situation since the federal rules are clashing. In response, the CFPB extended their time for sending notices to customers with the rules to be enacted on October 19.

At the same time, the extension aims to give certainty to servicers in giving out periodic statements concerning the bankruptcy status of borrowers while there are wrongly schedule in requirements that could lead to different legal clarifications. Looking back, the mortgage bad debts has significantly increased between 2007 and 2009 as it went through a financial crisis. There has been a serious examination occurred as servicers face misplaced paperwork, unfinished documentation and employees utilizing “robosigning” without proper evaluation. Consequently, the CFPB established means of protection for individuals from exploitative lending five years ago to bolster supervision of services.