Published January 18, 2013 02:39
January 17, 2013-- Today, in response to the Consumer Financial Protection Bureau’s (CFPB) release of National Mortgage Servicing rules, the California Reinvestment Coalition’s Associate Director Kevin Stein released this statement:
“The Consumer Financial Protection Bureau has released important uniform, national standards that detail servicer responsibilities and create some order out of the chaos that mortgage servicers have inflicted on working families over the last several years. Although there are strong provisions in these rules, CFPB missed an opportunity to go further on a number of servicer issues that have compounded the foreclosure crisis and harmed neighborhoods. The countless accounts of servicer misconduct— most recently revisited in the $8.5 billion settlement with the Office of the Comptroller of the Currency— should have been a smoke signal that more needs to be done to ensure that homeowners never again face the servicer abuses that became commonplace during the foreclosure crisis.”
“The CFPB’s rule fails to expand upon last year’s hard-fought legislative victory in California that ends the egregious dual track problem in our state by requiring the servicer to give a ‘yes’ or ‘no’ answer on a loan modification application before beginning or continuing with foreclosure proceedings. This rule puts some restrictions on dual track, but does not go far enough in imposing a hard stop on all foreclosure proceedings when homeowners try in good faith to keep their homes. These rules remind us once again how important the California Homeowners Bill of Rights will be for homeowners in our state, as well as the continuing and important role to be played by state legislatures and regulators.”
“The servicing guidelines also fell short in not addressing four critical issues facing California families and communities- servicer abuse of tenants, neighborhood blight caused by servicers failure to repair real estate owned (REO) properties, language access for limited English proficient (LEP) borrowers, and procedural hurdles that make widows vulnerable to foreclosure."
"Tenants living in foreclosed properties have had their utilities shut off, security deposits lost, and received illegal eviction notices because servicers do not comply with existing federal, state and local tenant protection laws. When servicers seize foreclosed properties, they have let them fall into disrepair, blighting neighborhoods and dragging down property values. And servicers have failed to translate documents into other languages for LEP borrowers, whose lack of access to this crucial information makes them particularly vulnerable to servicer abuses and loan modification scam artists. Finally, far too many widows and surviving children have unnecessarily lost their homes due to servicer error, lack of clarity in the rules, and technicalities. The CFPB should do everything it can to address these important consumer issues in the short term, as well as to vigorously and aggressively enforce the rules it has issued today.”