On August 4, 2016, the Consumer Financial Protection Bureau, the entity charged with protecting consumers’ finances issued a final rule, amending the 2013 Mortgage rules under RESPA (Real Estate Settlement Procedures Act), also referred to as “Reg X”; and amending TILA (Truth in Lending Act) also known as “Reg Z”.

Following the financial crisis, Title X of the Dodd Frank Act transferred rulemaking authority for specific consumer financial protection laws to the Consumer Financial Protection Bureau. Last week, the Bureau updated the way servicers must communicate with borrowers who have applied for mortgage assistance, or loss mitigation. The updates require services to notify borrowers when their application for loss mitigation is complete. Anyone who has submitted the RMA (Request for Mortgage Assistance) package, can testify to the number of document requests and re-requests from the mortgage servicers. No one really ever knew all documents were received until an offer was made. The new change, would keep the borrower informed of when the loss mitigation protections begin, an important tool to someone facing foreclosure and the resulting foreclosure or trustee sale.

The updates also provide protections of the loss mitigation rules to borrowers more than once during the life of the loan, changed from the one time previously required. Also new, are the protections extended to a successor in interest – someone gaining interest in the home such as through a marriage, divorce or death of a joint tenant.

Previous to the new amendment, borrowers in bankruptcy were denied the privilege of periodic statements. The new rules, in certain circumstances, require servicers to provide statements to the borrowers with information tailored to bankruptcy, as well as a modified early intervention notice to inform of loss mitigation options.

With regard to RESPA and TILA, FDCPA has determined the following:

  • Servicers do not violate FDCPA when communicating about the mortgage loan with confirmed successors in interest, in compliance with specified mortgage servicing rules in Regulation X or Z;
  • Servicers do not violate FDCPA with respect to the mortgage loan when providing the written early intervention notice required by Regulation X § 1024.39(d)(3) to a borrower who has invoked the cease communication right under FDCPA section 805(c); and
  • servicers do not violate FDCPA when responding to borrower-initiated communications concerning loss mitigation after the borrower has invoked the cease communication right under FDCPA section 805(c).
  • Though there are still details your attorney can help you sort through, these new rules offer steps to stop foreclosure on your home, with clearer communication throughout the process.


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