In case you were already done reading the three final rules introduced last Thursday (January 10th), more has been added to your reading list. Yesterday, the CFPB issued Mortgage Servicing Rules, with provisions that will impact both The Truth in Lending Act and The Real Estate Settlement Procedures Act. The effective date is January 10, 2014. There are some exemptions and relief for those who service only their own mortgages or mortgages of an affiliate, as long as no more than 5,000 mortgages are serviced.
The rule outlines the following:
- Requirements for information to be provided on periodic statements;
- Notice content and timing requirements for adjustable rate mortgages;
- Requirements for the crediting of payments and providing payoff statements;
- Restrictions on charging borrowers for forced-place insurance;
- Requirements for the resolution of errors;
- Requirements for the development of servicing policies and procedures;
- Requirements for initial and ongoing contact or attempts at contact with delinquent borrowers; and
- Requirements for handling loss, including generally prohibiting the initiation of foreclosure until a mortgage loan is more than 120 days delinquent.
A factsheet and summary of the rule was also provided for guidance.
The Agencies also issued a final rule on appraisal requirements for “higher-risk” mortgage loans. This rule will require an interior inspection and in some instances, an additional appraisal. The rule is effective January 18, 2014.
Stay tuned as we will be providing an in depth analysis of these final rules in an upcoming newsletter article.