On 12/9/2021, the CFPB published a blog post titled “Seven examples of unfair practices and other violations by mortgage servicers: CFPB supervision activities uncover red flags.”
In their post, the CFPB explains that during the pandemic, families struggle to afford their mortgage payments. It was noted that over 7 million homeowners entered forbearance programs to defer their monthly payments. With this, the CFPB closely monitored mortgage servicing companies to help families avoid unnecessary hardships and errors that could result in financial harm.
A recent review of CFPB’s 2021 supervision efforts revealed certain violations, including the following seven items:
Charging late or default-related fees to borrowers in CARES Act forbearance programs.
Failing to end preauthorized electronic fund transfers.
Charging consumers unauthorized amounts.
Misrepresenting mortgage loan transactions and payment history in online accounts.
Failing to review borrowers’ applications for loss mitigation options within 30 days.
Incorrect handling of partial payments.
Failing to automatically terminate Private Mortgage Insurance (PMI) on time.
Read the CFPB’s blog post here.
