The Consumer Financial Protection Bureau (CFPB) has spent the last 7 months making examinations into mortgage servicers and plans to issue corrective actions for several firms, according to bureau director Richard Cordray.
“We have the ability to examine mortgage servicers and send in examination teams. We have been doing that with different servicers. That’s been insightful for us. It will lead to corrective actions in a number of instances where they have not been up to snuff,” Cordray told a House committee Thursday.
The exams began in February. The bureau is looking at how servicers are complying with existing federal laws and identifies risks and possible violations. The CFPB is also reviewing how consumer complaints and loan transfers are handled.
A bureau spokesperson said the firms that had undergone exams so far would be kept confidential.
Cordray did not specify what “corrective actions” could include, but the bureau did levy its first enforcement action against Capital One this year over certain credit card violations. The bank had to refund customers $140 million.
The bureau will finalize rules in January governing future servicing standards. The proposal released in August covers what monthly disclosures servicers will be required to make to borrowers and when to provide options for avoiding foreclosure.
Cordray said not every servicing company has problems, but the industry as a whole has a lot of work to do. Many servicers are already adapting to similar rules under the $25 billion robo-signing settlement struck in March.
“In the mortgage servicing industry, things have not moved smoothly over the past five to six years,” Cordray told the committee. “It’s a troubled area.”
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