(Boston, MA) New Mortgage servicing standards announced by the Consumer Finance Protection Bureau (CFPB) Thursday attempts to correct a problem that may no longer exist by the time the rules are implemented. The CFPB has announced new rules that will restrict dual-tracking and a host of other common-sense consumer based guidelines but the problem with the regulations is they will become effective when it is too late.
The mortgage servicing rules won’t take effect until January of 2014. Although, the new restrictions would protect future homeowners from mortgage servicing errors and predatory practices, it does nothing for the thousands of homeowners who are being foreclosed on every day. Some of the new standards could help single mother Sharon Henson of Dallas save her home. But Henson has a sale date in a few weeks. These guidelines are not meant to protect her.
This announcement encourages lenders to accelerate the foreclosure process now without any consequences. “CFPB is providing mortgage servicers advance notice to do their dirty work before the new regulations go into effect”, states Bruce Marks, NACA Founder and CEO. “When the new servicing rules go into effect in 2014 the landscape will be very different with many more communities devastated due to CFPB’s failure as the consumer watchdog. When it comes to holding the banks accountable and providing assistance to consumers, CFPB has sat on the sidelines as a no show.” continues Marks.
NACA submitted thousands of servicer complaints from homeowners to CFPB. The bureau has yet to respond. CFPB should ensure homeowners have the opportunity to modify their unaffordable mortgages, instead of extending ample time for the banks to get their act together. CFPB, an agency created to protect consumers, has failed to help today’s homeowners who were victimized by the lenders the agency is supposed to regulate.
About the Neighborhood Assistance Corporation of America (www.naca.com)
NACA, a national non-profit, community advocacy and homeownership organization established in 1988, has been the lead organization in the fight to identify, expose, and oppose predatory and exploitive lending practices. NACA was the first to expose Fleet Bank’s lending abuses in 1991, and followed with numerous other campaigns against companies that victimize low and moderate income people pursuing the dream of homeownership.