The CFPB recently updated the Real Estate Settlement Procedures Act and Truth in Lending Act Mortgage Servicing Rules Small Entity Compliance Guide. The update includes guidance for the October 2017 interim final rule and the 2016 Mortgage Servicing Rule.
The 2017 interim final rule makes clarifications to the 2016 Mortgage Servicing Rule to address questions with early intervention requirements in regards to ceasing communication protection under the Fair Debt Collection Practices Act and provides periodic statement commentary for borrowers in bankruptcy.
The 2016 Mortgage Servicing Rule became effective October 19, 2017 and makes significant changes to The 2016 Mortgage Servicing Rule effective October 19, 2017 clarifies, revises, or amends provisions regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X’s servicing provisions; and prompt crediting and periodic statement requirements under Regulation Z’s servicing provisions. The final rule also addresses proper compliance regarding certain servicing requirements when a person is a potential or confirmed successor in interest, is a debtor in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act.
Small servicers should pay close attention to changes in the wording of force-placed hazard insurance notices that are now required. In addition, a definition for “delinquency” has been added and clarification in the form of commentary has been made for the definition of primary residence as it relates to loss mitigation procedures.