On January 10, 2014, the Consumer Financial Protection Bureau (CFPB) issued new mortgage servicing rules designed to protect borrowers when it comes to mortgage loans. The new rules require servicers to send period billing statements containing specific information, promptly credit mortgage payments, respond quickly to pay off requests, provide options to avoid forced-placed insurance, quickly resolve errors and respond to requests for information. These rules prohibit the servicer from rejecting partial payment. For instance, the servicer is required to place partial payment into a special account called a suspense account. Once the suspense account has sufficient funds to make a full payment the servicer must credit the account.
The partial payment must be included in the monthly mortgage statement. The new rules also require servicers to send notice at least 45 days before it purchases a force-placed insurance policy (giving borrowers sufficient time to purchase their own policy). If a borrower provides proof of hazard insurance coverage, the servicer must within 15 days: cancel any force-placed insurance policy and refund any premiums paid for overlapping periods in which the borrower’s coverage was in place.
Other rules require servicers to provide homeowner’s with assistance, prohibit dual tracking and restrict continuing foreclosure after borrower requests help. Unfortunately, a CFPB report released in the summer of 2015 shows that even though these rules are in place, certain servicers continue to dual track and give borrowers the runaround when it comes to foreclosure avoidance programs. This means you should be aware of your rights and keep an eye out for violations. If you think your servicer is not complying with these rules, contact our office to help you enforce your rights.