TheMReport — News and strategies for the evolving mortgage marketplace.
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Th e M Rep o RT | 41 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SERVICING THE LATEST cFPB gives Warning on msr transfers In case anyone missed the memo: The bureau is watching. t he Consumer Financial Protection Bureau (CFPB) issued a bulletin to mortgage servicers outlining how they should handle the transfer of mortgage servicing rights (MSRs). The bulletin includes a reminder to mortgage servicers to pay close attention to the new "common- sense" mortgage rules put in place by CFPB in January 2014 that are aimed at protecting consumers during servicing transfers. "At every step of the process to transfer the servicing of mort- gage loans, the two companies involved must put in appropriate efforts to ensure no harm to con- sumers. This means ahead of the transfer, during the transfer, and after the transfer," CFPB Director Richard Cordray said. "We will not tolerate consumers getting the runaround when mortgage servicers transfer loans." Mortgage servicers handle the collection of payments from borrowers on behalf of lenders and investors, as well as services such as escrows, loan modifi- cations, and foreclosures. The borrower generally has no input in the selection of their servicer. Servicing transfers are common among mortgage servicers, and CFPB says its concern in this area "remains heightened due to the continuing high volume" of MSR transactions in today's market. The bureau's mortgage servic- ing rules require more from servicers in order to ensure the consumer is protected. For example, accurate recordkeep- ing on the part of the servicer is required, as is the timely correc- tion of errors when the con- sumer requests it. Servicers are obligated to keep a set of policies and procedures in place to facilitate the accurate and prompt transfer of information when MSRs are bought and sold. The bureau stated in the bulletin that its examiners will be scrutiniz- ing those servicing transfers that include pending loss mitigation applications and approved modifi- cation plans. Examples of compli- ance with MSR regulations include the timely transfer of loss mitiga- tion paperwork and flagging loans under evaluation for loss mitigation or already approved for assistance. Any servicer found to be in viola- tion of consumer financial laws applicable to servicing transfers will be subject to corrective measures at the hand of the CFPB.