The Office of Congressman Maxine Waters, D-Calif., released the following statement on the CFPB’s final servicing rules Thursday.
The rule is a strong first step towards limiting widespread predatory practices by the mortgage servicing industry, which have led to many American families needlessly losing their homes. It establishes rules that provide lenders with clear guidance and significantly increases protections for borrowers. It also enhances servicers’ disclosure requirements and includes provisions to help rein in the unfair practice of “forced place” insurance.
However, the rule should not be the only step toward protecting borrowers from wrongful foreclosure. First, servicers must be required to engage in loss mitigation. Also, more progress should be made in addressing the problem of “dual tracking,” by which servicers consider borrowers for loan modifications while simultaneously moving them towards foreclosure. Furthermore, homeowners must be guaranteed a more robust right to appeal when they are denied loan modifications.
In the past, bank regulators have failed to prevent servicers from aggressively pushing borrowers into foreclosure, and largely did not recognize the seriousness of the problem. The rule issued today demonstrates the importance of the Consumer Financial Protection Bureau, which was established in the Wall Street Reform and Consumer Protection Act over the objections of many people who argued that consumers needed no further protections. One of my primary objectives as Ranking Member of the Financial Services Committee will be to make sure that the law remains strong and that American families are provided adequate protections.