CFPB Requests Public Input on Prototype of Monthly Mortgage Statement

The Consumer Financial Protection Bureau (CFPB) is seeking public input on a draft monthly mortgage statement designed to make it easier for homeowners to understand their loans and avoid unnecessary costs and fees. The draft monthly mortgage statement is available by clicking here. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that most mortgage borrowers receive periodic statements containing specified information. Under the Dodd-Frank Act, periodic statements generally must be provided by the creditor, assignee of the loan, or the mortgage servicer that manages the loan. Servicers are businesses that typically collect payments from the borrower on behalf of the owner of the loan. They also handle customer service, escrow accounts, collections, loan modifications, and foreclosures. “This draft statement shows consumers the breakdown of their mortgage payments—what money goes to the loan principal, interest, and fees,” said CFPB Director Richard Cordray. “This information will help consumers stay on top of their mortgage costs and hold their mortgage servicers accountable for fixing errors that crop up. Given the widespread mortgage servicing problems we’ve seen over the past few years, consumers need clear disclosures they can count on.” Under the Dodd-Frank Act, the statement must include information about the principal loan amount, the current interest rate, the date on which the interest rate may next reset, a description of any late payment and penalty fees, information about housing counselors, and a telephone number and email address that may be used to contact the mortgage servicer. The CFPB is in the process of testing a prototype monthly statement with consumers to make it as user-friendly and useful as possible. In order to broaden the input it receives as it develops a standard statement, the CFPB is also posting the prototype online to solicit general feedback from consumers, industry stakeholders, and other interested parties. The public will have further opportunity to provide comment on a version of the draft standard form when CFPB proposes a rule on it later this year. The development and publication of a consumer tested and publicly-vetted monthly statement will benefit consumers and facilitate compliance by mortgage servicers and creditors.