On August 4, 2016 the Consumer Financial Protection Bureau (CFPB) published revisions to rules for servicers that went into effect on January 10, 2014. The CFPB issued proposed amendments to those rules in November 2014, and the final rule adopts many of the proposed provisions.
This final rule clarifies, revises, or amends provisions regarding:
- Force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X’s servicing provisions;
- Prompt crediting and periodic statement requirements under Regulation Z’s servicing provisions;
- Certain servicing requirements when a person is a potential or confirmed successor in interest, is a debtor in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act.
The Bureau is issuing concurrently with this final rule an interpretive rule under the Fair Debt Collection Practices Act relating to servicers’ compliance with certain mortgage servicing rules.
Most of the provisions of the final rule will take effect 12 months after publication in the Federal Register, which is expected soon. The provisions relating to successors in interest and the provisions relating to periodic statements for borrowers in bankruptcy will take effect 18 months after publication in the Federal Register.
While the revisions are extensive the rules retain the small servicer exception that allows most community banks to avoid the burden of the new rules.
A copy of the 901-page final rule is available at: https://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/amendments-2013-mortgage-rules-under-real-estate-settlement-procedures-act-regulation-x-and-truth-lending-act-regulation-z/