CFPB finalizes technical correction to mortgage servicing rule

The Consumer Financial Protection Bureau finalized a rule on Thursday that gives mortgage servicers more latitude in sending periodic statements to borrowers in bankruptcy.

The final rule gives mortgage servicers a temporary exemption, for a single statement period, from certain timing requirements in sending periodic statements to borrowers entering and exiting bankruptcy. The rule is a technical revision to the CFPB's 2016 mortgage servicing rule.

Under the 2016 rule, the CFPB had made the exemption good for a single billing cycle, but servicers complained about technical complexities and operational challenges of using billing cycles as the timing basis. The one-time exemption is meant to help servicers make the transition to tougher regulatory requirements.

Mortgage statement
Monthly mortgage statement with home insurance policy papers

In the final rule announced Thursday, the CFPB said a "single-statement exemption" would be "clearer and more straightforward."

"After issuing the [2016 servicing] rule ... the bureau learned that certain technical aspects of the timing of this transition may create unintended challenges and be subject to different legal interpretations," the bureau said in a press release. "In October 2017, the bureau sought public comment on a proposed rule that would provide greater certainty to help servicers comply."

Both the 2016 rule and the proposed revisions were promulgated under former CFPB Director Richard Cordray, and the final rule was issued under acting CFPB Director Mick Mulvaney.

Servicers must send modified periodic statements or coupon books to certain consumers in bankruptcy starting April 19, 2018.

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Servicing Bankruptcy Policymaking Mick Mulvaney Richard Cordray CFPB
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