The Consumer Financial Protection Bureau is reminding mortgage servicers that they are required to protect consumers during loan transfers between companies.

During the transfer process — as a loan shifts from one servicing shop to another  mortgage servicers should avoid losing paperwork, losing track of the mitigation plans of a homeowner or hindering the consumer’s chance of saving their home from an unnecessary foreclosure, the CFPB said.

The bureau is voicing these concerns with a large number of sizable servicing transfers now taking place. The agency outlined a specific series of guidelines for servicers involved in massive transfers of MSRs.

"Consumers should not be collateral damage in the mortgage servicing transfer process," said CFPB Director Richard Cordray."This guidance directs all mortgage servicers, both banks and nonbanks, to follow the laws protecting borrowers from the risks of such transfers, and makes clear that we will be monitoring them for compliance."

A mortgage servicing transfer, which typically occurs when the owner sells the right to service its loan or when the owner outsources the servicing duties, can involve the moving of hundreds of thousands of loan documents.

Unfortunately, mortgage-servicing transfers can create a lot of additional stress for the consumer, who is forced to work with several different companies with different-looking paperwork, staff and addresses in which to send the paperwork, the CFPB advised.

The CFPB is seeing an increase in the number of complications related to servicing transfers in the last year after analyzing consumer feedback. In its supervisory role over both banks and nonbanks, the CFPB is reminding the industry that it is crucial to minimize the risks a servicing transfer can present to consumers.

Due to the fact that these servicing transfers are impacting millions of borrowers, the CFPB is keeping these problems at the forefront of its focus. For servicers who fail to fulfill their obligations under the law, the CFPB will take appropriate measures, including remediation measures for harmed consumers.

"The Federal Housing Finance Agency (FHFA) supports the CFPB’s efforts to improve servicer compliance with legal requirements related to mortgage servicing transfers.  FHFA shares the goal of improving servicer performance, which will result in better outcomes for both consumers and investors," the FHFA said in response the CFPB’s bulletin.

The U.S. Department of Housing and Urban Development also backs the CFPB’s recent reminder by saying, "HUD supports CFPB’s Bulletin, entitled ‘Interagency Guide on Servicing Transfers,’ and the agency’s effort to improve servicer compliance which should result in better outcomes for both consumers and investors."

Click here to read the CFPB's full bulletin.