The latest Supervisory Report released on June 23, 2015, by the Consumer Financial Protection Bureau (“CFPB”) details a number of mortgage origination and servicing rules violations discovered by Bureau examiners during the first four months of 2015.
Some of the reported violations include:
Dual tracking of foreclosures — borrowers already approved for loan modifications and those who were current on their mortgages received foreclosure notices.
Loss mitigation application “runarounds” — mortgage servicers failed to send required notices to borrowers who submitted loss mitigation applications within five days after receiving applications as required by new CFPB rules. Others were found to have requested more documentation that was inapplicable to the application or had already been submitted.
Disregard for collection complaints — some debt collectors failed to investigate disputes and at least one debt collector did not review any consumer complaints.
Credit report inaccuracies — at least one of the credit reporting agencies failed to conduct regular monitoring of furnished information to ensure it met required standards and had no quality controls in place to test the accuracy of existing consumer reports.
Fair lending violations — some institutions were found in violation of the Equal Credit Opportunity Act for denying or discouraging mortgage applications from consumers relying on public assistance income.
According to the report, the CFPB examiners notify financial institutions of their concerns and suggestions for remedial action. Often these are resolved without the Bureau taking enforcement action. In the first four months of 2015, non-public supervisory actions and violations that were self-reported resulted in $11.6 million in remediation paid to more than 80,000 consumers.
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