CFPB To Play Significant Role Under Foreclosure Settlement Proposal

The 50 state attorneys general and a group of federal regulators have proposed settlement terms to the country's five largest mortgage servicers to resolve ongoing foreclosure abuse investigations. The recently released term sheet (the "Proposal") would affect millions of mortgages nationwide by imposing, among other things, mandatory loss mitigation requirements. The 27-page document calls for modification eligibility based on valuation formulas, an end to "dual track" processing, and guaranteed independent review. The Proposal sets forth requirements for foreclosure affidavits and certain internal policies to ensure compliance with any settlement. The Proposal carves out a significant oversight role for the Consumer Financial Protection Bureau ("CFPB" or "Bureau"). The CFPB will receive significant information regarding the servicers' loan modification policies and activities, foreclosure affidavit training and procedures, and input into each servicers' procedures to