CFPB Reopens Comment Period on ‘Periodic Statements in Bankruptcy’ Mortgage Servicing Amendments

The Consumer Financial Protection Bureau (CFPB) recently reopened the comment period for its proposed amendments to the mortgage servicing related rules under RESPA and TILA that generally would require servicers to provide modified periodic statements to consumers who have filed for bankruptcy.

The full announcement is available at:  Link to Announcement.

As you may recall, in December 2014, the CFPB published for notice and comment a proposed rule that among other things would require mortgage servicers to provide certain modified periodic statements to consumers in bankruptcy (subject to specific exceptions), with different disclosures and notices required for different types of bankruptcies.  The CFPB included model forms, stating “[p]rior to finalizing any such sample forms, the Bureau will publish and seek comment on a report summarizing the methods and results of the consumer testing.”

The original comment period for the proposed rule closed on March 16, 2015. The CFPB notes that it received over 100 comment letters, as well as “additional oral ex parte presentations and written ex parte comments on the proposed rule” after the close of the comment period,” and “conducted ex parte outreach to servicers to gain insight into their mortgage processing systems and capabilities to implement proposed changes to the servicing of loans in bankruptcy.”  The CFPB also conducted consumer testing as to the model forms.

The CFPB is now reopening the comment period until May 26, 2016.

More specifically, the CFPB seeks comment “on the report summarizing consumer testing of sample periodic statement forms for consumers in bankruptcy.”

The report to which the CFPB refers — Fors Marsh Group, Testing of Bankruptcy Periodic Statement Forms for Mortgage Servicing (Feb. 2016) – is supposed to be available at: http://www.consumerfinance.gov/reports but at the time of this update, it was not yet available.

The CFPB states that it is “not soliciting comment on other aspects of the proposed rule, including the merits of the proposal to require periodic statements for consumers in bankruptcy under certain circumstances.”

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Ralph Wutscher's practice focuses primarily on representing consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. He represents the lending and financial services industry as a litigator, and as regulatory compliance counsel. For more information, please see: http://mauricewutscher.com/attorneys/ralph-t-wutscher/.