Consumer Financial Protection Bureau (CFPB) attempted to positively resolve obsolete mortgage service issues in 2013. There has been a greater borrower-friendly environment ever since. Now, borrowers did not have to face unforeseen dilemmas. The new mortgage servicing issues ensure consumer-friendly transparency. The new rules guarantee justifiable treatment of every consumer.
What is interesting is that the veterans of mortgage lending are helping tech-savvy professionals to create tools that could be useful in the future. The thrust will remain on security and compliance which are the regular concerns of every borrower. With new systems, lenders can take leads to get potential clients. The sales workforce chart manages the real time sales and also offers automated email platform for marketing.
Otherwise, this is how the CFPB’s reforms have impacted the mortgage market to relieve customers.
No More Foreclosures
CFPB guarantees homeowners get a fair say in procedures in order to avoid foreclosures. It ensures the borrower has a fair chance to assess other alternatives. It also ensures their rights to apply for loan modifications. Here’s how it is materialized:
Restricting Foreclosure: Borrowers are given a reasonable period to submit applications for loan modifications. Lenders are disallowed to begin foreclosures before the period of the application processing for alternatives by borrowers.
Notification of Alternatives: Lenders have to comply to providing the borrower with timely notifications of alternatives with detailed information. The onus of financial favorability of options is on the borrower.
Right to Fair Review: The lender’s policy must allow the borrower to assess as many alternatives as possible to avoid foreclosure. These options could vary from loan modifications to postponements of payments.
Lenders must also have procedures to foresee the rightful information dissemination to the consumer. Missing information, the status of applications, and mortgage mitigations must be made clear to the consumer.
No More Cost Surprises
To avoid the overcharging of fees by lenders, new rules guarantee the right to know what you owe.
CFPB prevents borrowers from the risk of running into unexpected issues. Initial amounts, due dates and payment deadlines will be highlighted to the borrower through regular statements.
Warning notifications to the borrower of changing interest rates will now be provided well in advance. Servicers also have to provide borrowers with a detailed account of total expenditures. Transaction records ensure the borrower does not run into additional costs unprepared for.
No More Run-arounds
To ensure record clarity and prevent untimely hassles, new rules save the borrower from unnecessary running around. Lenders are required to be prompt in notifying receipts and credit to the customer’s account. By storing consumer information there is an increase in information accuracy.
Accessibility at later stages of transactions are to be guaranteed through regular record-keeping. Errors are to be corrected in 30 days. There’s also a reasonable investigation conducted to inform the borrower of the reason for errors.
New Forms Replace the Old
According to the latest TRID standards, new concise forms displace old forms which ran into pages. The Loan Estimate form and the Closing Disclosure form have decreased the burden of paperwork for the borrower and the lender alike.
CFPB plans to implement more reforms to ensure hassle-free transitions from traditional mortgage rules. The likely exploitation of the customer is avoided at all costs under the new rules. Today, a borrower wouldn’t have to worry about losing applications and records. There is assurance of protection of every borrower’s right to a fair chance at financing his or her own mortgage deal.
Preethi vagadia is a business architect worked in Mortgage and Finance software department with top notch companies and has over 8 years of experience in loan origination software solutions ,Mortgage Loan Servicing software solutions,mortgage management software etc. She has also worked in several process improvement projects involving multi-national teams for global customers in warranty management and mortgage.