Yesterday, the Consumer Financial Protection Bureau (CFPB) released a report on mortgage servicing issues. In relevant part, the CFPB highlighted ongoing loss mitigation mistakes made by banks, noting that CFPB examiners discovered problems like:
- Inconsistent communications with borrowers, giving them conflicting instructions for loss mitigation processes;
- Inconsistent loss mitigation underwriting, waiving certain fees and interest charges for some borrowers but not others;
- Long application review periods, making the loss mitigation process especially hard on consumers whose accounts are also dual-tracked for foreclosure;
- Incomplete loan files, making it challenging for consumers to find out about their loan modification applications when they call the servicer for help;
- Poor procedures for requesting missing or incomplete information from consumers, making it difficult for consumers to provide the correct documentation; and
- Deceptive communications to borrowers about the status of loan modification applications, leading some consumers to faster foreclosure.