The Housing Policy Council of the Financial Services Roundtable (FSR) is urging the Consumer Financial Protection Bureau (CFPB) to withdraw and reissue its Request for Information (RFI) regarding the Real Estate Settlement Procedures Act mortgage servicing rule.
The CFPB released its RFI in May to assess the effectiveness of the RESPA mortgage servicing rule. The bureau asked the public to comment on the plan, to suggest sources of data, and provide other information that would help with the assessment.
The rule took effect on January 10, 2014, giving borrowers new consumer protections related to mortgage loan servicing, many of which were aimed at helping consumers who were having trouble making their mortgage payments.
The rule requires, among other things, that servicers provide disclosures to borrowers related to force-placed insurance, respond to errors asserted by borrowers in a timely manner, and follow certain procedures related to loss mitigation applications and communications with borrowers. In accordance with the Dodd-Frank Act, the CFPB is required to assess its rules within five years after they take effect, thus the RFI.
In a letter to the CFPB, FSR’s Housing Policy Council Ed DeMarco said his group believes that the proposed assessment, as described in the RFI, is based upon a deficient application of the Dodd-Frank Act requirements.
“We respectfully request that CFPB withdraw the RFI for reformulation and reissuance,” DeMarco wrote. “We believe that the Bureau framed its statutory obligations in this RFI very narrowly and that this framing produces a flawed assessment methodology. The RFI truncates the full set of objectives that CFPB must incorporate into its assessment plan; instead of relying on the complete list of five objectives established by the Dodd-Frank Act, CFPB focuses solely on its own four regulatory purposes.”
HPC believes reconfiguring the proposed methodology would enable the bureau to assess the effectiveness of the rule more broadly and consider its effect on consumers, servicers and the marketplace.