CFPB Seeks Input on Assessment of Mortgage Servicing Rule

The Consumer Financial Protection Bureau is revisiting its 2013 RESPA Mortgage Servicing Rule.  The rule, after several amendments, took effect on January 10, 2014, giving borrowers new consumer protections related to mortgage loan servicing, many of which were aimed at helping consumers who were having trouble making their mortgage payments. 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires CFPB to review or assess some of its rules within five years of implementation.  The mortgage services rule assessment is designed to address the rule's effectiveness in meeting the purposes and objectives of title X of the Dodd-Frank Act and the specific goals of the rule, using available evidence and data.

CFPB summarizes the RESPA mortgage servicing rule as requiring, among other things, that servicers provide disclosures to borrowers related to force-placed insurance, respond to errors asserted by borrowers in a timely manner, and follow certain procedures related to loss mitigation applications and communications with borrowers. The assessment seeks to determine how well the rule has met its objectives of insuring servicers respond to borrower requests and complaints in a timely manner, maintain and provide accurate information, help borrowers avoid unwarranted or unnecessary costs and fees, and assist them with options for avoiding foreclosure.

The Bureau is requesting public comment, not on the rule, but on the assessment plan itself.  The plan proposes to compare servicers and consumer activities under the rule to a baseline presumed to exist if the RESPA rule were not in effect.  The agency will use loan-level data from a small number of servicers, data from the National Mortgage Database and the American Survey of Mortgage Borrowers, consumer complaints, and other available sources.  

The Bureau is inviting consumers, housing counselors, servicers, consumer advocates, industry representatives, and other interested parties to comment on the plan, asking for suggestions as to sources of data and providing other information that would help with the assessment.  Comments will be due 60 days after the request is published in the Federal Register, and CFPB intends to issue an assessment report no later than the fifth anniversary of the rule's implementation, January 10, 2019.

The Bureau said, "Conducting the assessment will advance our knowledge of the benefits and costs of the key requirements of the RESPA mortgage servicing rule. The assessment will also provide the public with information on the mortgage servicing market, and help us to fulfill our commitment to be an evidence-based and effective agency."