This January, new Consumer Financial Protection Bureau (CFPB) rules designed to protect homeowners from needless foreclosure and exploitative mortgage servicing practices went into effect. Partnering with the National Housing Resource Center and with help from the California Reinvestment Coalition, NCLR reached out to housing counselors and homeowners across the country to find out if mortgage servicers were following these rules.
In the survey, we asked respondents to tell us how mortgage servicers deal with homeowners and housing counselors. The new rules outlaw deceptive servicing practices that have historically plagued the mortgage sector, including “dual tracking,” in which servicers simultaneously begin the foreclosure process while borrowers are pursuing a loan modification.
While we’ve received many insightful and helpful responses, we need your help.
Your responses and stories matter greatly to us and will be shared with the CFPB to help ensure that servicers are honoring all new borrower protections.
The results described below are preliminary and could change based on new responses:
- In a preliminary reading of the ongoing survey, our data indicate that some servicers are failing to follow the rules. One common problem involved mortgage servicers repeatedly losing documents or asking borrowers to resubmit the same documents multiple times. Of 90 respondents who answered this question, over two in three said that servicers “always” or “often” lose documents or ask for resubmissions.
- Although dual tracking is prohibited under the CFPB rules, respondents report that the practice is still occurring, with nearly 30 percent of 100 respondents answering that servicers only “occasionally” honor the dual tracking ban. Furthermore, one in seven say that servicers rarely or never honor the rule. This could spell huge problems for all homeowners affected.
- Additionally, the rules require servicers to establish one or more staff who are knowledgeable about the borrower’s case and can be easily reached by phone. Our results indicate that this may be a continuing problem, with nearly three in 10 respondents claiming that servicers rarely or never comply with this rule.
While language access is not currently part of the CFPB rules, we also asked respondents about this topic, which is highly relevant for many Latino homebuyers and homeowners. Our preliminary data highlight a lack of language access for borrowers whose preferred language is other than English. Of 85 respondents, only about one in six said that servicers always or frequently provide documents in a borrower’s preferred language. This could indicate a wider language access problem in the servicing industry.
Though our survey does indicate that many servicers are complying with the new CFPB rules and interacting with borrowers appropriately, our preliminary results highlight that some servicers continue to practice deceptive servicing practices that hurt homeowners.
Our survey is ongoing and remains open, and we encourage homeowners and housing counselors to tell their stories about how mortgage servicers are honoring, or ignoring, the new CFPB rules.
We’ll share your stories with the CFPB and continue working to ensure that strong homeowner protections become a reality in the mortgage market.