On Thursday, the CFPB released a rule to require mortgage servicers to provide simplified billing statements and extra notice of rate changes to borrowers, and the rule raises an exemption threshold on monthly mortgage statements.
The CFPB rule, which will force mortgage servicers to help ensure that their customers know all of their options to prevent foreclosure, contains an exemption for some requirements for credit unions and other institutions that service and originate fewer than 5,000 loans, an increase from an original threshold of 1,000 and a move advocated by the Credit Union National Association.
“We actively advocated for the CFPB to increase the periodic statement requirement threshold from their proposed 1,000 loans serviced to a higher number,” CUNA President and CEO Bill Cheney said. “Our priority has been to ensure that as few credit unions as possible would be subject to these requirements. The 5,000 threshold is a marked improvement over the proposal, and while the devil is in the details, it appears small servicers such as credit unions will also be exempt from the loss mitigation application handling procedures, which is also a significant win for credit unions.”
CUNA said that it is reviewing the CFPB’s release, adding that more exemptions may be incorporated into the final rule, which is set to take effect January 2014.
Under the rule, servicers will be prohibited from advancing foreclosure proceedings if a borrower has applied for a loan modification or other measure to prevent foreclosure. The rule will also make it more difficult for servicers to move to a foreclosure judgment or complete a foreclosure sale.