The Consumer Financial Protection Bureau (CFPB) has continuously shown over time that fair lending and fair servicing are the same and that fair lending affects the servicing of mortgages. However, recently, specific servicing problems have been raised by the CFPB regarding this, including CARES Act violations.
Charging borrowers in forbearance costs for nonpayment is an example of a CARES Act violation noted. The Consumer Financial Protection Bureau (CFPB) has also taken a keen interest in “junk fees,” claiming in a news release announcing a call for information that “[the] CFPB is concerned about costs that substantially exceed the marginal cost of the service they pretend to cover,” among other things.
As the pandemic’s ripple effects continue, the Consumer Financial Protection Bureau (CFPB) has stressed fair lending, fair servicing, and protection for individuals entering forbearance. These policies will only become more important in the future. With a fair lending and fair servicing lens, lenders can use technology to assess compliance, quality control, and quality assurance.
Lenders can use technology to start self-auditing, self-identifying, and self-correcting any problems with their results. Then, when the CFPB, or another prudential regulator, comes knocking, lenders who are proactive in assessing and testing their compliance and servicing systems, particularly through the lens of fair lending and fair servicing, will be well prepared. Loss mitigation deadlines, poor English proficiency communication, fees levied, and PMI termination compliance should all be double-checked by lenders to ensure that they are actively maintaining the policies and regulations set for fair lending. To read more about how lenders can actively maintain fair lending using technological tools, click here.
About Note Servicing Center
Note Servicing Center provides professional, fully compliant loan servicing for private mortgage investors so they can avoid the aggravation of servicing their own loans and just relax and get paid.
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