The U.S. Consumer Financial Protection Bureau (CFPB), an agency that Congress established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), issued rules last year that were aimed at making sure home buyers who take out a mortgage could get clear information, on an ongoing basis, about its terms and any changes.
Now those rules are actually in force, as of January 10, 2014. The CFPB issued this helpful booklet, “What the new mortgage servicing rules mean for consumers,” to explain the details. Here’s a summary of its summary!
1) Your mortgage lender or servicer must give you a written mortgage statement each month (or other billing cycle), containing details about your debt, past payments, how your payments are being applied, and more.
2) If you’ve got an Adjustable Rate Mortgage (ARM), your mortgage servicer must warn you at least two months ahead of time if it’s going to change your interest rate.
3) The day your mortgage servicer receives your payment, it must credit you for it.
4) If you send a letter asking how much it will cost to pay off your mortgage – that is, pay the whole thing (and any prepayment penalties), not just one of your periodic payments -- the services must give you the total (as of a specified date) within seven business days.
5) Although your lender can buy, and charge you for, homeowners’ insurance in the event that you can’t afford to keep buying it yourself, the lender can’t charge you more than an amount that is reasonable (given the insurance costs) or that is permitted by state insurance regulations.
6) No fair hiding from consumers: Five days is all the time your mortgage servicer has in which to acknowledge your requests for information or complaints about errors. After that, it must fix problems or answer questions within 30 to 45 days.
7) Be nice to customers! (That’s the gist of what the new rules require, anyway.)
8) Lenders must be proactive in contacting customers who are late on their mortgage payments, and must advise you of workout options.
9) Need a loan workout? The new rules set various requirements and deadlines for how the servicer must work with customers.
10) Getting no action on your workout request? The new rules mandate that your case be reviewed by somone who wasn’t part of the initial decisionmaking on your request.
Perhaps most important, here’s how to contact the agency if your mortgage servicer isn’t following the rules: at www.consumerfinance.gov/complaint or (855) 411-CFPB (2372).