The Consumer Financial Protection Bureau on Friday issued guidance for transferring mortgage servicing rights to a servicer or sub-servicer. “As consumers do not have a choice with respect to the transfer of servicing, compliance with regulatory requirements is especially important in risk mitigation and consumer harm,” the CFPB said.
To help facilitate compliance with the servicing rules, the bureau highlighted several practices for servicers to consider, including: developing a servicing transfer plan; engaging in quality control work after transfer of preliminary data; determining servicing responsibilities for legacy accounts; conducting a post-transfer review to determine the effectiveness of the transfer plan; tracking consumer complaints and loss mitigation performance metrics; and identifying loans in default, active foreclosure and bankruptcy and any forbearance agreements entered in with the borrower.
While the guidance was in development prior to the outbreak of the coronavirus, the CFPB acknowledged that servicers may be experiencing difficulties related to the pandemic. The bureau noted that, with respect to servicing transfers that are requested or required by a federal regulator or by the security issuer of government loans, it would be “sensitive to good-faith efforts demonstrably designed to transfer the servicing without adverse impact to consumers.”