ABA yesterday called on the Consumer Financial Protection Bureau to take a holistic approach to its review of the 2013 servicing rule to understand its full effects on servicers and consumers. The review — which is required under the Dodd-Frank Act — must be completed by 2019.
In comments on the CFPB’s assessment proposal, ABA urged the bureau to incorporate the 2013 TILA servicing rules and the 2016 servicing amendments into its evaluation. The CFPB should also consider the trickle-down effect of the underwriting requirements of the Ability-to-Repay/Qualified Mortgage rule, which is also under review by the bureau, ABA noted.
The association further recommended that the CFPB closely examine how the rules have improved the response and engagement of delinquent borrowers; the effectiveness of certain disclosures; and how the rules have affected the servicing market. ABA also offered several recommendations for improving the servicing rules, including revisiting the rule’s successors in interest requirements in situations where a borrowers is still living or dies without a will and excluding “posse letters” from a servicer’s information request and error resolution obligations.
In addition, ABA said that the bureau should further explore the issue of “rolling delinquencies,” where borrowers are chronically delinquent but never exceed 120 before making a payment, and reconsider the five-day acknowledgement notice that must be provided after receiving a borrower’s loss mitigation application, noting that the short timeframe presents a challenge for servicers. For more information, contact ABA’s Krista Shonk.