Oversight, Regulation

GAO: Treasury has not assessed servicer compliance with non-English speaker policies

140px-US-DeptOfTheTreasury-Seal.svgA recent study released by the Government Accountability Office found that while the U.S. Treasury requires mortgage servicers to develop policies to increase housing program accessibility for non-English speakers, the Treasury has not assessed compliance with the requirement.

The U.S. Treasury was directed in 2000 and 2011 to improve access to federal housing programs, such as the Making Home Affordable program.

As of November 2013, approximately 1.3 million borrowers had entered into a permanent mortgage modification through the Home Affordable Modification Program. While the Treasury has made a number of efforts to increase participation in housing programs, it has only recently developed limited English proficiency-related guidelines and procedures for MHA programs.

The GAO report found that the U.S. Treasury has not provided servicers with any clarification on how to establish a policy for “effective relationship management” with LEP borrowers and has not assessed servicer compliance with the requirement.

“Housing counselors have noted that LEP borrowers continue to encounter language-related barriers in obtaining access to MHA program benefits,” the report said. “Without a comprehensive strategy that includes guidance for servicers on engaging with LEP borrowers and monitoring of servicers, Treasury cannot ensure that all potential MHA participants have equal access to program benefits. Because the MHA program provides direct outlays of taxpayer dollars, it is important that Treasury take appropriate steps to ensure that all eligible borrowers, including those whose primary language is not English, have access to MHA program benefits.”

The GAO recommended that the Treasury assess the extent to which servicers have implemented internal programs to monitor compliance with fair lending laws, issue guidance on working with LEP borrowers and work to strengthen its programs.

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