The Consumer Financial Protection Bureau this week released a supervisory highlights report covering key findings and supervisory actions in mortgage servicing. This report underscores the CFPB’s ongoing efforts to scrutinize mortgage servicers in the aftermath of the pandemic. The document highlights ongoing monitoring by the bureau of emerging risks in default servicing activity post-COVID-19 and the increase in foreclosure starts.
Although the CFPB news release and introductory section emphasize servicers levying so-called “illegal junk fees,” the majority of the report’s content addresses regulatory breaches and operational shortcomings, particularly concerning streamlined loss mitigation processes. The report also demonstrates the CFPB’s application of unfair, deceptive or abusive acts or practice authority, or UDAAP, in the mortgage servicing sector, categorizing several practices as deceptive or unfair, even though they fall under the purview of Regulation X. The CFPB anticipates publishing in May a proposal to revise Reg X.
