Recently amendments to the 2013 Mortgage Servicing Rules under Regulation X were finalized. The amendments implement the Real Estate Settlement Procedures Act, and Regulation Z, which implements the Truth-in-Lending Act. The final rules include clarifications, revisions, and amendments affecting regulatory provisions and official interpretations across a broad range of topics related to mortgage servicing and foreclosures.
The final rules will generally become effective in October 2017 and, in some cases, April 2018. The rules, however, were released ahead of the recent presidential election and the new administration has called for a temporary freeze on new regulations. A timing delay is possible, though considered unlikely as the rules both clarify and amend provisions of existing regulations.
The attached Point of View highlights challenges that servicers will face as they begin to operationalize these changes, including issues with servicing technology platforms, disclosure, and other communication requirements, and complaints management. CFPB Director Richard Cordray has stated that ensuring lenders take appropriate action on consumer complaints and maintaining compliance with REPSA are two of the CFPB’s primary areas of supervisory focus for 2017. It is imperative that institutions proactively make the necessary adjustments to current policies, procedures, and mortgage servicing systems to reflect the provisions of the final rule and strengthen their overall compliance management program.