How CFPB Guidelines Will Affect Agents, Servicers and Borrowers
Over the past few months, the Consumer Finance Protection Bureau has outlined how they will begin putting the “service” back in mortgage servicing. Most real estate brokers and agents have heard borrowers complain about the poor service they’ve received from representatives at mortgage servicing companies.
An article recently posted in Forbes described the specific ways in which the CFPB will begin monitoring for statement clarity, faster service and more accurate electronic recording. The creation of standardized forms and set guidelines will be tested and approved by those working in the industry throughout 2012. The guidelines and new paperwork will be considered finalized in January 2013.
The mortgage servicing industry will experience big changes due to these new expectations. Mortgage servicing previously had little incentive to provide good service to borrowers. Their level of service in no way affected their bottom line as they were paid by the lenders.
Now, the CFPB will step-in and investigate reports of non-compliant mortgage servicing companies, and possibly enforce hefty fines. The mortgage servicing companies that already have high standards of customer service and those that quickly adhere to the CFPB will be ahead of their competition.
Borrowers will welcome the changes being implemented by the CFPB. Borrowers will see an increased interest from the mortgage servicing companies in how they interpret their statements and their overall satisfaction. And satisfied borrowers are good for the real estate industry as a whole.
Real estate brokers and agents will not be greatly affected by the changes made by the CFPB, however, it’s important to know how your clients will be affected throughout their purchase process and afterwards. Continuing to recommend great lenders to your clients will look good for you, especially if your recommendation is service-oriented on top of how quickly your client can close their loan. Send your clients to lenders who work with mortgage servicing companies that fully comply with all of the CFPB standards, which means a little research may be necessary on your end.
It’s nearly impossible to know if a lender is planning to change mortgage servicing companies, but do your best to stay aware of these changes. Sometimes, brokers and agents can be blamed for poor service from lenders and mortgage servicing companies. Do your best to avoid those companies. Hopefully, with the CFPB’s new guidelines, the image of the real estate industry as a whole will improve in the eyes of borrowers and homeowners.