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CFPB Lists Compliance Violation Trends
Here are two violation trends that could be very costly to you if you are not abiding by CFPB’s guidelines. Not only the CFPB but the Office of the Controller of the Currency (OCC) and the Federal Reserve Board require the strengthening of processes and procedures for the loss mitigation and foreclosure practices supported by the major mortgage servicers. However the below items are violated often. Make sure your servicers know what they need to do to reduce the risk on your collateral.
1. Loss mitigation:
Regulation X sets forth requirements for soliciting, completing, and evaluating loss mitigation applications. As part of these requirements, servicers must notify borrowers in writing within five days after receiving a loss mitigation application acknowledging that it received the application, and stating whether it is complete or incomplete. If the application is incomplete, the servicer must list in its notice the additional documents and information the borrower must submit to complete the application, often called “acknowledgement notices.”
2. Foreclosure Process
In reviewing the loss mitigation and foreclosure process, examiners also found certain unfair and deceptive practices. At least one servicer sent notices of intent to foreclose to borrowers already approved for a trial modification and before the trial modification’s first payment was due without verifying whether borrowers had a pending loss mitigation plan before sending its notice.