CFPB Issues Final Rule on Servicing Borrowers Facing Bankruptcy
March 9, 2018
The Consumer Financial Protection Bureau (CFPB) has issued a final rule designed to help mortgage servicers communicate with certain borrowers facing bankruptcy.
The final rule updates the CFPB’s 2016 mortgage servicing rule, which created concern among many servicers regarding how they were to provide statements and coupon books in connection with a consumer’s bankruptcy. Last October, the agency offered a proposed rule for comment.
The updated rule, according to the agency, “provides a clear single-statement exemption for servicers to make the transition, superseding the single-billing-cycle exemption included in the 2016 rule.” In announcing the change, the CPFB added, “The Bureau believes this final rule provides a clearer and more straightforward standard than the timing requirement adopted in the 2016 Mortgage Servicing Final Rule, offering greater certainty for implementation and compliance, without unnecessarily disadvantaging consumers.”
The effective date for the rule is April 19, the same date that the other sections of the 2016 rule relating to bankruptcy-specific periodic statements and coupon books become effective.
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