New Rules, Fewer Runarounds For Mortgage Borrowers
When you take out a mortgage loan to buy a home, you trust the mortgage servicing industry to work. Mortgage servicers are responsible for sending you bills, processing your payments, answering your questions, and addressing any problems that may arise. When servicers fall down on the job, that can have serious consequences for consumers. People who are behind on their mortgages may not know what options they have. Bills may show up with unexpected and expensive charges. People who need more information may not be able to get it in a timely manner.
Today we are issuing two new rules to make this market work better for America’s homeowners. Director Cordray announced them this morning in Atlanta.
When we proposed these rules back in August, we said we wanted to put the service back in mortgage servicing. The two final rules we’re issuing today are designed to do just that. The result of these new rules will be a market with fewer surprises and runarounds for mortgage borrowers.
Here’s some of what’s new:
SPACE FOR CONSUMERS TO PURSUE ALTERNATIVES TO FORECLOSURE
Borrowers fall behind on mortgage payments for a variety of reasons. Sometimes they can make up these payments quickly. Sometimes they need to figure out an alternative payment strategy. Sometimes they face the loss of their homes. But in any of these circumstances, they should know what avenues are available to them.
Restrictions on dual tracking: Dual tracking is the term used when servicers move forward on a foreclosure at the same time they’re working with the borrower to avoid foreclosure. Many consumers report that they have discovered too late that they were foreclosed on by the same servicer they were working with to find an alternative. Under the new rules, servicers cannot begin foreclosure proceedings against you until your payments are 120 days behind.
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