The new focus is on giving homeowner more information on pending interest rate changes and outstanding balances is the aim of a change in rules for mortgage servicers proposed Friday by the Consumer Financial Protection Bureau.
The rules would require servicers to respond to homeowners calls for information or complaints within 5 days, which is a first for the entire mortgage servicing industry. No such rules exist now.
” No surprises and no run-arounds.” said Richard Cordray, director of the bureau who summed it up.
“We want to make sure that at all times consumers can get information about how much they owe, what they are paying, and how their payments are being applied,” Cordray said. “And if consumers fall behind on their mortgage, we want them to know how to assess their options and take action.”
The proposal would cover major bank servicers, such as Bank of America Corp., as well as smaller non-bank players like Ocwen Financial Corp.
Isaac Boltansky, an analyst with Compass Point Research & Trading LLC in Washington, said in a research note that the new rules would support a “secular shift in the mortgage servicing industry” away from big banks toward specialty servicers like Ocwen.
“We expect the big bank servicers to offload a sizable portion of their servicing assets,” Boltansky wrote.