The Consumer Financial Protection Bureau is concerned many mortgage servicers are not acting in the best interest of loan owners or investors and more communication between the two parties is needed.
In issuing a mortgage servicing rule on Thursday, the consumer bureau has included requirements for servicers to report to investors on their efforts to modify loans and prevent foreclosures.
The investors want the loans to be restructured so delinquent borrowers can resume their payments, according to CFPB officials. But the pooling and servicing agreements are not always clear about what loss mitigation options should be offered to troubled borrowers.
Under the final rule, servicers must have policies and procedures to contact investors to confirm what loss mitigation options should be offered.
A CFPB official told reporters that the bureau can take administrative actions if the servicer doesn’t comply with the investors’ requirements.