CFPB Calls For Changes To Mortgage Servicing With Proposed Rule

Summary: On November 20, 2014, the Consumer Financial Protection Bureau ("CFPB" or the "Bureau") proposed changes to the rules governing mortgage servicing and foreclosures—Regulation X, which implements the Real Estate Settlement Procedures Act ("RESPA"), and Regulation Z, the implementing regulation for the Truth in Lending Act ("TILA"). The most significant parts of the proposal would expand the number of times a borrower may receive foreclosure protection through loss mitigation, thereby delaying the foreclosure process. The proposed rule would put in place additional servicing transfer protections, take steps to protect borrowers from a wrongful foreclosure sale, and help ensure that surviving family members and others who inherit or receive property have the same protections under the mortgage servicing rules as the original borrower. Other parts of the proposal will present unique operational challenges, such as providing periodic statements to bankrupt