Nonbank Servicers on CFPB’s Target List

The Consumer Financial Protection Bureau is using its authority over non-banks to target independent mortgage servicing companies.

“In moving forward to implement its nonbank supervisory program, the CFPB will expand its ongoing supervision of [bank owned] mortgage servicers to nonbank mortgage servicers,” according to an outline of the bureau’s priorities under newly appointed CFPB director Richard Cordray.

The supervision program will include examinations of servicers’ operations, reviewing their compliance with federal consumer financial laws.  

“One important component that examiners will be looking for is the nonbank’s internal ability to detect, prevent and remedy violations that may harm consumers,” the bureau said late this week.  

If necessary, CFPB will take enforcement actions to address violations that harm consumers.  Generally, servicers will be notified in advance of an upcoming examination.

CFPB has a consumer hotline and is already receiving complaints about servicers.  One North Carolina homeowner complained to CFPB that her servicer had increased her mortgage payments while she is in a trial modification, charging her for inspections, appraisals and other unexplained fees. “Rebecca has frantically complied with all of these demands because she is afraid of foreclosure and is doing whatever she can to stay in her home,” according to CFBP.

In related news, CFPB director Cordray made several agency appointments, including the appointment of Raj Date as his chief deputy. (See related story.) Cordray also named Kent Markus to head the agency’s enforcement bureau.

Markus served as an assistant attorney general of Ohio and in the Justice Department as counselor to the U.S. Attorney General. Cordray is a former Ohio AG.

Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_511/nonbank-servicers-cfpb-target-list-1028207-1.html

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