The bureau also proposed a new rule to provide more certainty for mortgage servicers about when to provide periodic statements to consumers in connection with their bankruptcy case.
“Today’s action should make it easier for mortgage borrowers to receive timely information from their mortgage servicers about available options for saving their home, even if they have submitted a request to cease communication,” CFPB Director Richard Cordray said. “In addition, we are proposing changes to clear up confusion about when to provide periodic statements with important loan information to borrowers in bankruptcy.”
In 2016, the bureau made changes to the mortgage servicing rules to require mortgage servicers to send written notices, referred to as early intervention notices, to certain consumers at risk of foreclosure who have requested a cease in communication under the Fair Debt Collection Practices Act.
Under this law, consumers have the option to request that companies stop contacting them except for limited purposes. Once these borrowers become delinquent, the bureau’s 2016 amendments generally require that mortgage servicers send notices to these consumers every 45 days to inform them of available foreclosure prevention options but prohibit servicers from sending the notices more than once in a 180-day period. The bureau has heard concerns that once a servicer sends a notice to one of these borrowers, the rule requires servicers to provide the next notice exactly on the 180th day after the prior one, regardless of whether it is a weekend or a holiday.
To alleviate these concerns, the interim final rule gives servicers a longer, 10-day window to provide the modified notices. The bureau believes that this change offers greater certainty for servicers’ ability to comply with the rule, without undermining important borrower protections. The interim final rule becomes effective on Oct. 19, 2017.
The CFPB has also learned that certain technical aspects of the 2016 amendments regarding the timing for servicers to provide periodic statements in connection with a borrower’s bankruptcy case may create unintended challenges. Thus, the bureau is also seeking public comment on a proposed rule that would provide greater certainty for mortgage servicers regarding the timing for providing periodic statements in those circumstances. The proposed effective date for the proposed rule is April 19, 2018.
The comment period on both the interim final rule and the proposed rule will close 30 days after publication in the Federal Register.