CFPB releases updates to mortgage servicing exam procedures

Today, the Consumer Financial Protection Bureau (CFPB) is releasing our updated Mortgage Servicing Examination Procedures, providing transparency to stakeholders about how we do our work. The Examination Procedures describe the types of information that CFPB examiners gather to evaluate mortgage servicers’ policies and procedures; assess whether servicers are complying with applicable laws; and identify risks to consumers related to mortgage servicing. The updated Examination Procedures include CFPB guidance released since the last update in June 2016.

The updates cover forbearances and other tools that mortgage servicers have used during the COVID-19 national emergency. Those tools include streamlined loss mitigation options that satisfy the temporary flexibilities in the CFPB’s mortgage servicing rules established by the COVID-19 related amendments. We understand these streamlined options have been very successful in keeping consumers in their homes, and note that COVID-19 will continue to impact families, even beyond the national emergency. We also note that as long as these streamlined loss mitigation options are made available to borrowers experiencing hardship due to the COVID-19 national emergency, those same streamlined options can also be made available under the temporary flexibilities in the rule to borrowers not experiencing COVID-19-related hardships. We expect servicers to continue to utilize all the tools at their disposal—including, if available, streamlined deferrals and modifications that meet the conditions of the CFPB’s COVID-19 related mortgage servicing rules—in their efforts to keep consumers in their homes.

The updated Examination Procedures also integrate focus areas from our Supervisory Highlights findings, including further questions about the fees servicers charge borrowers, such as phone pay fees, and misrepresentations related to foreclosure. Additionally, it advises examiners to seek information on how the servicers communicate with borrowers about homeowner assistance programs. Currently, funds from the Homeowner Assistance Fund (HAF) can help homeowners avoid foreclosure, but only if mortgage servicers work with state housing finance agencies and HUD-approved housing counselors to help borrowers as they complete the HAF application process.

The Mortgage Servicing Examination Procedures are intended for use by CFPB examiners, and the CFPB makes it available to serve as a resource to anyone subject to its exams. These procedures will be incorporated into the CFPB’s general supervision and examination manual.