WASHINGTON—The “successors-in-interest” aspect of CFPB’s mortgage servicing proposal was examined Monday during a mortgage servicing meeting at the offices of The Financial Services Roundtable that included NAFCU Regulatory Affairs Counsel Alexander Monterrubio.
NAFCU has flagged the provision as a potential problem area of the proposal. Several other financial trade groups were also present at the roundtable, including the Mortgage Bankers Association.
In 2014, the CFPB issued proposed amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z). One of the proposed changes would apply Regs X and Z mortgage servicing rules to successors-in-interest, or individuals confirmed as successors to mortgage borrowers who have died or transferred the property to family members.
NAFCU explained that mortgage servicers have expressed concerns that they could be liable under state or federal privacy or debt collection laws for giving successors-in-interest account information as mandated under Regs X and Z.
“There is also concern about the potential for fraud. Servicers have asked CFPB to clarify in any final regulation how servicers can both protect consumers and avoid impropriety in these dealings,” NAFCU stated.
Last year, NAFCU urged the CFPB to reconsider its proposed amendment dealing with successors-in-interest over concerns that this aspect of the proposal could expose credit unions to violations of the Gramm-Leach-Bliley Act.