In response to feedback from credit unions, including thetrades, the Consumer Financial Protection Bureau increased itsmortgage servicing exemption from 1,000 loans to 5,000 loans.
|However, because the CFPB has not yet released the actual rules,it is unclear how broad the exemption will be for small servicers.Those rules are expected to be released later Thursday.
|The CFPB did provide a sneak-peak of its new final mortgageservicing regulations, saying in a release it will mandate newrestrictions for servicers when dealing with struggling borrowersthat include a ban on initiating foreclosure proceedings after theborrower has submitted a modification application.
|Servicers must also meet new statement standards, provide adisclosure before adjusting interest rates, and provide moretransparency when purchasing forced-placed property insurance. Thenew rules additionally mandate certain service standards likepromptly crediting payments and correcting errors.
|“Our priority has been to ensure that as few credit unionsas possible would be subject to these requirements and the5,000-loan threshold is a marked improvement over the proposal,”said CUNA President/CEO Bill Cheney in a release.
|“While the devil is in the details, it appears small servicerssuch as credit unions will also be exempt from the loss mitigationapplication handling procedures, which is also a significantdevelopment for credit unions,” Cheney said.
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