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At the Mortgage Bankers Association’s National Mortgage Servicing conference, David Silberman, the Consumer Financial Protection Bureau’s associate director for research, markets and regulations took time to address the recent regulations released in January by the CFPB.
“The rules we finally issued are different and better than the proposals, because of stakeholders like the MBA,” Silberman began. Earlier the MBA CEO David Stevens praised the CFPB for working well with the industry. However, the U.S. Chamber of Commerce sees vast room for improvement at the Dodd-Frank created regulator.
Silberman continued by stating that the basic goal of what the CFPB tried to do was protect all borrowers from being caught off guard throughout the servicing process.
Mortgages are, in fact, what make homeownership possible, Silberman reminded the crowd. This experience can depend on the performance of the servicer.
“In too many instances, servicers have failed to provide the level of services that borrowers deserve,” Silberman said.
Silberman explained that when the crisis hit, the servicing industry was overwhelmed with the volume of borrowers who now needed help. This high volume led to errors, and the CFPB began taking complains about various mortgage issues.
For structural reasons, market forces couldn’t be relied upon to resolve these problems. And so, the servicing industry set out to develop a low-cost business model that would help smooth out the wrinkles in the industry.
Silberman noted that during the brainstorming process, every stakeholder was urging the CFPB is different directions. Taking advice from all sides, the CFPB established a process “to protect borrowers in a fair and balanced way,” Silberman added.
“People are entitled to be treated with respect,” said Silberman. “The Bureau is committed to doing what we can to ensure effective implementation.”
A lot is expected of servicers between now and next January, when the rule goes into effect, Silberman noted. However, the CFPB fully understands that servicers can’t properly implement what they do not understand. With that in mind, the CFPB plans to release periodic updates throughout the year before the CFPB becomes effective next January.
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