In response to mortgage servicer violations,
CFPB updates exam manual
June 23, 2016 -- Some mortgage servicers continue to use failed technology that has already harmed consumers and putting their companies in violation of the Consumer Financial Protection Bureau’s new servicing rules, a new report from the bureau states – leading the agency to release an updated mortgage servicing exam manual.
In a special edition supervision report focused specifically on mortgage servicers released June 22, the bureau noted that since it began examining the servicers in January 2014 it has found “violations because of deficient technology and process breakdowns.” In a release, the agency said that “specifically, examiners have observed problems with loss mitigation and servicing transfers.”
To encourage general compliance with its rules, the Bureau announced release of an updated mortgage servicing exam manual.
“Mortgage servicers can’t hide behind their bad computer systems or outdated technology. There are no excuses for not following federal rules,” said CFPB Director Richard Cordray in the bureau press release. “Mortgage servicers and their service providers must step up and make the investments necessary to do their jobs properly and legally.”
The agency pointed out that its report includes supervision work completed between January 2014 and April 2016. It stated that, while the servicing market has made some investments in compliance, “those investments have not been sufficient across the marketplace to ensure compliance.”
CFPB examiners found, the agency stated, that outdated and deficient technology poses risks to consumers across a number of mortgage servicers. “In addition, several mortgage servicers lack proper training, testing, and auditing of their computer systems and software platforms and those of their service providers. As a result of this insufficient investment, mortgage servicing problems continue to plague consumers,” the agency stated.