CFPB issues final rule to amend the Regulation Z mortgage servicing rule
Wednesday, March 14, 2018
Final rule’s amendment to help mortgage servicers communicate with certain borrowers facing bankruptcy
Recently, the CFPB issued a final rule to assist mortgage servicers when communicating with certain borrowers who are facing bankruptcy. These amendments to Regulation Z revise the timing requirements for servicers transitioning between modified or unmodified periodic statements and coupon books when consumers enter or exit bankruptcy.
The Truth in Lending Act requires mortgage servicers to provide periodic statements to borrowers. The final rule provides a little more leeway to mortgage servicers providing periodic statements to consumers entering or exiting bankruptcy. The rule also provides a clear single-statement exemption for the next periodic statement or coupon book that a servicer would otherwise have to provide, regardless of when in the billing cycle the triggering event (entering/exiting bankruptcy) occurs. This single-statement exemption replaces the single-billing-cycle exemption in the 2016 Mortgage Servicing Final Rule. Prior to this new rule, the exemption only applied if the payment due date for the billing cycle was less than 14 days after the triggering event.
The 2016 mortgage servicing rule requires that servicers send modified periodic statements or coupon books to certain consumers in bankruptcy beginning April 19, 2018. The rule addresses the timing for servicers to transition to providing or ceasing to provide modified periodic statements to consumers entering or exiting bankruptcy. The CFPB has developed sample forms for servicers to use.
Please see the final rule for the timing requirements.
CFPB Newsroom, CFPB Issues Final Rule To Help Mortgage Servicers Communicate With Certain Borrowers Facing Bankruptcy, March 8, 2018.
CUNA News, CFPB Issues Final Rule to Amend Reg Z, March 8, 2018.