On June 22 2016, the Consumer Financial Protection Bureau (CFPB) released a special edition supervision report that focused specifically on mortgage servicers. The report found that some mortgage servicers continue to use failed technology that has already harmed consumers, putting the company in violation of the CFPB’s new servicing rules. In its examinations since the new CFPB rules took effect in January 2014, CFPB examiners have found many violations because of deficient technology and process breakdowns.
Mortgage servicers are responsible for collecting payments from the mortgage borrower and forwarding those payments to the owner of the loan. The mortgage servicing industry at times experienced problems with bad practices and sloppy recordkeeping. To address these widespread mortgage servicing problems, the CFPB put in place new rules designed to eliminate surprises and runarounds for homeowners.
The rules require servicers to maintain accurate records, give troubled borrowers direct and ongoing access to servicing personnel, promptly credit payments to their accounts and correct errors on request. The rules also include protections for struggling homeowners, including those facing foreclosure. Compliance with many of these requirements necessitates strong policies and procedures related to systems and technology.
If your company services mortgages, then it would be a wise move to perform an immediate check on your technologies and payment systems in order to ensure they are up-to-date and within CFPB compliance guidelines. When the CFPB finds a recurring problem like this, they will be checking all mortgage servicers to ensure compliance.
Even if your agency does not service mortgages, it would still be a wise move to perform an immediate check on your technology and payment systems to ensure compliance. Software can become outdated, various technologies may not integrate well and systems can crash at anytime and cause problems for the client. When the CFPB receives enough complaints about a particular company, they will perform a compliance audit. As we have seen in previous blog posts, penalties for non-compliance can reach into many thousands of dollars, which can destroy a business.
The first step in ensuring compliance is to hold a meeting with your payment processor to be assured that their systems are up to full compliance. Bring up the CFPB regulations and any concerns that you may have. Ask them to provide you with written documentation of compliance. BillingTree prides itself on being continuously up-to-date in order to ensure that all of their clients can rest assured that their payment processing system is always compliant. Contact us today for more information.