The National Consumer Law Center (NCLC) conducted a nationwide survey from Feb. 24 to March 3 of more than 100 attorneys and housing counselors representing homeowners. The survey’s results show significant ongoing problems with mortgage servicing. While the CFPB’s mortgage servicing regulations have made important progress in standardizing industry practices, enhancing procedural transparency, and improving servicer accountability, many challenges remain.
“Despite recent progress, our survey shows that homeowners still face major roadblocks when trying to get help when they face a hardship,” said NCLC Attorney Alys Cohen. “The Consumer Financial Protection Bureau can address these problems by closing loopholes in existing rules and expanding protections for homeowners who face divorce or death of a loved one."
NCLC’s survey examined a number of questions relating to current CFPB mortgage servicing rules to explore the need for further improvements. The results indicate an urgent need for enhanced protections to:
►Help successors in interest (widows, orphans, or other heirs) avoid foreclosure;
►Close the loopholes created by the CFPB’s requirement to submit a “complete application” before accessing important mortgage protections; and
►Remove the CFPB’s current exemption from servicing protections for so-called “duplicative” applications for loan modifications or other assistance where the homeowner faces a new hardship.
Additionally, more than half of respondents reported they have had cases where the servicer would not let a widow or other successor apply for a loan modification or receive loan information without providing paperwork that either did not exist or did not apply to the situation. Nearly 70 percent of respondents stated that servicers "often" or "most of the time" ask for additional documents from a homeowner after the homeowner has submitted everything requested by the servicer.