CFPB Supervisory Highlights – 2020 Mortgage Findings

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Treliant Takeaway:

Treliant’s Corporate & Regulatory Compliance stands ready to assist you in with all your mortgage needs. We can help you to prepare for upcoming examinations through assessments and mock audits. And we can help you remediate any issues that arise.  Regardless of your size or regulator, we are here to help.

Mortgage Supervisory Highlights:

On Tuesday, June 29, 2021, the Consumer Financial Protection Bureau released Issue 24, 2021,  Supervisory Highlights covering examinations that were completed January 1, 2020 to December 31, 2020. The following mortgage findings are of note:

Mortgage Originations
  • Loan Originator Compensation Violations (Reg Z)
    • Lower compensation for bond loans
    • Higher compensation for construction loans
  • Disclosures Violations (Reg Z)
    • Title Insurance Premiums where there is a simultaneous issuance rate for lender’s and owner’s title policies
  • Deceptive Waivers of Borrowers’ Rights (Reg Z)
    • Security Deed Riders
    • Loan Security Agreements
Mortgage Servicing
  • Dual Tracking (Reg X)
    • Initiating foreclosure first filings with facially complete loss mitigation applications
    • First filings of foreclosure before decisioning loss mitigation appeals
    • Policies and procedures failed to notify counsel to stop foreclosure legal filings after the acknowledgement notice of receipt of a loss mitigation instead of at the time of receipt
  • Foreclosure Timelines (Reg X)
    • Policies and procedures failed to account for variances for repeat loss mitigation applications and communications promised borrowers foreclosure timelines that were not met (the day foreclosure would begin)
  • PMI Termination (Reg X)
    • Failure to consider PMI in annual escrow analyses for loans scheduled for automatic terminations
  • Credit Bureau Reporting (FCRA, Reg V)
    • Failure to conduct reasonable investigations of direct disputes
  • Debt Collection (FDCPA)
    • Collection calls to places of employment during work hours
    • Communications with third parties
    • Failure to cease communications upon written request or refusal to pay
    • Harassment when unable to pay
    • Threats when debts were in dispute
    • False representation to consumers regarding the impact of paying off debt
    • Failure to send debt validation notices with required language