The Consumer Financial Protection Bureau (CFPB),is an Federal agency of the United States government responsible for consumer protection in the financial services industry and businesses; this includes banks, credit union, mortgage companies and mortgage servicers such as Mr. Cooper, Bank of America, WElls Fargo, Caliber Home Loans, or Chase Mortgage(not a complete list)
CFPB's was authorized by the Dodd–Frank Wall Street Reform and Consumer Protection Act, whose passage in 2010 was a congressional and presidential response to the mortgage and financial crisis of 2007 and 2008 that caused the “Great Recession”.
The CFPB released their Summer 2018 edition of Supervisory Highlights. This report summarizes a year long investigative activity of the auto loan servicing, credit card, debt collection, mortgage servicing, payday lending, and small business lending industries.
Compliance efforts of mortgage servicers were shown to be completely inadequate. Specially, focusing just on the distressed homeowners and parties facing foreclosure, the report references four very specific troubling areas, where their examinations identified unfair and deceptive acts or practices where "consumers experienced” substantial injury that could not be reasonably avoided. A summary of the findings:
- After successfully making trial payments, borrowers were not placed into a permanent mod in a timely manner. The borrowers continued to accrue fees and interest at the previous rate, and were continued to be reported to credit agencies as delinquent. The servicers did not remediate their errors when notified, and were found not to have procedures or policies for remediation. The servicers blamed the problems on insufficient staffing.
- Borrowers were charged more than what they agreed to on their loan mod agreement, resulting in either higher payments or for a longer term than agreed upon. The servicers blamed the problems on their payment calculation software.
- Borrowers were told that if they accepted a loss mitigation offer by phone or in writing by a specific date that foreclosure would not be initiated. However, that wasn't true and foreclosure was still initiated, leading to a loss of the borrower's home.
- Borrowers who submitted complete loss mitigation applications less than 37 days from the foreclosure were sent notices saying the applications were complete and that the decision would be received within 30 days. But after sending the notices the foreclosure sales were conducted without a decision on the application being made.
These are very serious findings, affecting some of the most financially distressed parts of our country. When you are in facing foreclosure, and you rely on your lender's or servicer's promises and/or agreements, there should be an expectation that things will be handled professionally and competently. Overcharging a distressed homeowner or even worse, foreclosing on their home in violation of an agreement, is unacceptable. Common practice among services in dealing with distressed homeowner is to loose documents that are submitted in support of their request for relief(loan modification or short sale); failure to notify the borrower of missing documents; failure to return many phone calls; consistent and deliberate changing of Single Points of Contact(SPOC); overall lack of follow up from mortgage servicers.
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Directly from the CFPB website it states: : We're the CFPB. The Consumer Financial Protection Bureau is a US Government agency that makes sure banks and lenders and other financial companies treat you fairly.”
It seems to me that the MOTTO of this agency as above is not accurate and shameful.
I see this in my practice on a daily basis. Mortgage lenders constantly running over homeowners. It is not right or fair to honest good faith hardworking homeowners.
We do not let the banks run over our Clients.