On October 9, 2012 MBA sent their comment letter to CFPB on the Proposed Servicing Rules. Several important points were made in the 97 page letter. Their recommendations focused on numerous areas, including small servicer exemption, error resolution and information requests, loss mitigation, and early intervention for troubled or delinquent borrowers, just to name a few.
- Suggest that the numerous provisions in the Proposed Rule are not required by the Dodd-Frank Act, TILA or RESPA. Nonetheless the CFPB rules should not grant borrowers a private right of action against servicers for failing to follow requirements that were not authorized by Congress in the Dodd-Frank Act and which are not within the scope of RESPA or TILA.
- The small servicer exemption should be expanded to include more servicers, varying corporate structures, and additional types of relief.
- They should take appropriate time to formulate the final rule and establish a reasonable implementation period because of the numerous regulations that are being formulated and must be implemented, suggesting at least two years from the date of publication to implement the final rules with small servicers given an additional six months.
- After a thorough review of the Proposed Rule, we believe it would be mutually beneficial for all parties involved if the CFPB held a day-long meeting about challenges relating to information and technology management. The focus would be on proposed forms production and data management, including the periodic statement, ARM disclosures, servicing file, and record retention requirements. A joint meeting with the mortgage industry stakeholders involved in the implementation process would allow the industry to work together to better help consumers
MBA supplied numerous comments specific to RESPA and others specific to TILA provisions.
Comment period for the proposed rule closed on October 9, 2012. 134 comments have been received and can be viewed at regulation.gov .