The key term in the new set of rules is “transparency.” The bureau says the rules “would provide consumers with clear and timely information about their mortgages so they can avoid costly surprises.”
- Clarity on monthly statements: The bureau says mortgage service firms must produce cleaner, more user-friendly monthly mortgage statements. Improvements would include a breakdown of payments explaining principal, interest, fees and escrow information. In addition, servicers must include all recent account activity and regular updates on fees.
- Heads-up for ARM adjustments: Consumers who have adjustable-rate mortgages may sometimes be in the dark on when their rates change, and by how much. The CFPB wants servicers to provide early disclosures on rate changes. Servicers must also provide loan-counseling options for consumers who couldn’t afford new payment requirements.
- “Good faith” efforts on foreclosure options: The rules would force mortgage service companies to provide “early information and options” in reaching out to delinquent homeowners and provide advice and counseling to help mortgage consumers avoid foreclosure.
The bureau also has new rules that would force mortgage service providers to clean up their paperwork and “maintain accurate and accessible documents and information.” According to federal law, the U.S. public will have 60 days to review and provide comments on the new regulations, and the final set of rules will be issued in January.