Feds find mortgage problems at banks and other mortgage servicersA report by the Consumer Financial Protection Bureau shows mortgage servicing problems at banks and mortgage companies. The report also found that many mortgage companies lack adequate systems for ensuring they’re following federal laws.
Mortgage servicers are responsible for collecting payments from mortgage borrowers on behalf of loan owners. They also often handle customer service, escrow accounts, collections, loan modifications, and foreclosures.
In supervising both bank and mortgage servicers, bureau examiners have uncovered problems that can be harmful to consumers, said Richard Cordray, director of the bureau. These include:
- Sloppy account transfers.
- Poor payment processing.
- Mistakes in helping qualified struggling borrowers with alternative plans for repayments.
- Missing a comprehensive consumer compliance program.
- Lacking formal policies and procedures.
- Forgoing independent consumer compliance audits.
For details, see “Examiners Find Mortgage Servicing Problems at Banks and Nonbanks.”