Following its adoption of the mortgage servicing rules on January 17, 2013, the Consumer Financial Protection Bureau (CFPB) indicated that it would not aggressively enforce the rule for the first six months the rule was in effect. With the issuance of an enforcement order for violation of those servicing rules, however, the industry is now on notice that the leniency period is over and servicers need to be fully compliant with the rules.
Background: The Servicing Rules
The servicing rules are composed of amendments to both Regulations X, the implementing regulation for the Real Estate Settlement Procedures Act, and Regulation Z, the Truth in Lending Act.
The Regulation X servicing rules are:
Force-Placed Insurance. Imposes a number of limits on force-placed insurance, including a requirement that the servicer send two notices of the required insurance before force-placing insurance.
Error Resolution and Information Requests. Establish requirements for responding to written information requests and complaints of errors.