NEW YORK (MainStreet) — Home loan borrowers who believe they’re playing the mortgage game on an uneven playing field (one that is not tilted in their favor) may be getting a break or two from the federal government.
That potential help comes from the Consumer Financial Protection Bureau, which has rolled out a handful of consumer-friendly rules for mortgage services firms.
The bureau notes, in its list of new rules, that home loan consumers have been on the receiving end of lousy service from mortgage companies, and that it’s time to level the field.
“Millions of homeowners are struggling to pay their mortgages, often through no fault of their own,” explains bureau Director Richard Cordray, in a press release. “These proposed rules would offer consumers basic protections and put the ‘service’ back into mortgage servicing. The goal is to prevent mortgage servicers from giving their customers unwelcome surprises and runarounds.”
Consumers should know that mortgage services aren’t the original lenders – they’re the financial services firms banks and mortgage lenders choose to handle the paperwork linked to home mortgages, such as payments, escrow accounts and even foreclosures. Homeowners have no say in selecting a mortgage services company; the original lender chooses the company after the loan is made.
Federal regulators have called mortgage services firms on the carpet over the past few years, especially regarding sloppy paperwork practices related to home foreclosures and requests for loan modifications. Rarely, regulators say, do those paperwork errors result in favorable treatment for taxpayers.
As part of the Dodd-Frank Financial Reform Act, it’s the bureau’s role to enact and enforce regulations that potentially favor home mortgage consumers.