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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsConsumer Watchdog Finds Rampant Abuse In The Mortgage Industry
By Alan Pyke
The most basic level of the mortgage business is still plagued by abusive and error-prone business practices, according to a new report from the Consumer Financial Protection Bureau (CFPB). It found that the financial companies that manage mortgages employ sloppy paperwork processes, fail to communicate important information to homeowners, and often dont even have staff or plans for ensuring they are in compliance with the rules.
The report, which draws on work the agencys examiners did from November of last year through June of 2013, focuses on mortgage servicing companies those that handle the actual repayment of loans, rather than the investment companies that package up and securitize mortgages to trade with one another. These companies have the most direct customer service responsibilities of any sector of the housing finance industry and are required to communicate with borrowers promptly and clearly when, for example, they sell a persons mortgage to another servicing company.
CFPB examiners found that sloppy account transfers and poor payment processing still abound in the industry. Servicers frequently give inadequate notice to borrowers of a change in address to send payments, resulting in late payments, and many firms do not have clear protocols on how to handle key documents. Servicers are also supposed to take an active role in helping struggling homeowners find more manageable repayment plans where possible, but CFPB examiners found the industry flouts that responsibility. Applications for loan modifications take too long to process, requests for documents related to alternative payment options are confusing, duplicative, and inconsistent, and deceptive communications to borrowers about modification requests continue...Many of the worst stories of wrongful foreclosure involve servicers failing to properly process on-time payments.
They were supposed to be curbed by new regulations and legal settlements with servicers. But the new CFPB report confirms that companies continue to violate the terms of the 2012 National Mortgage Settlement, as the settlements auditor had previously reported, and finds the same improper practices abound at companies that werent covered by that $25 billion deal. The CFPB also found that many mortgage servicers do not yet have systems in place to ensure they are complying with those rules and often decline to bring in independent compliance auditors who might help correct their failings. When examiners identify these issues, CFPB expects corrective action, the report says.
http://thinkprogress.org/economy/2013/08/22/2508351/consumer-watchdog-finds-rampant-abuse-and-noncompliance-by-mortgage-servicers/
Jackpine Radical
(45,274 posts)He has a team of expert nasty-letter writers hard at work at this very moment, composing a warning that will singe the eyebrows right off all those fraudsters.
ProSense
(116,464 posts)Jackpine Radical
(45,274 posts)there would be no need for pressure.
I hope they won't have to divert any attention away from busting medical marijuana fiends in order to attend to trivial matters of endemic mortgage fraud.
ProSense
(116,464 posts)When is pushing for such action never a good idea?
Jackpine Radical
(45,274 posts)But some people have more--shall we say--gravitas--than others. Their specific gravity is proportional to the density of their funds.
I have often done what I could to express my views, but the pressure I can exert with my one vote and maybe $200 donation is not exactly on a par with that of the banksters.
ProSense
(116,464 posts)Jackpine Radical
(45,274 posts)Certainly the cause of Truth, Justice & the American Way is better off with it than without it.
Aerows
(39,961 posts)that fire is hot and water is wet. News at 11.