On December 8, 2021, the Consumer Financial Protection Bureau (CFPB) published the 25th edition of its Supervisory Highlights report, which summarized key findings from examinations completed between January 2021 and June 2021. While the report covers a number of areas of consumer finance, it specifically stated the CFPB “is prioritizing mortgage servicing supervision work in light of the increase in borrowers needing loss mitigation assistance this year.” Consistent with this, the report identifies a number of unfair acts or practices allegedly committed by an unspecified number of mortgage servicers. Specifically, it found that one or more mortgage servicer:

  • Charged prohibited late fees and default-related fees to borrowers in CARES Act forbearances;
  • Continued to initiate electronic fund transfers (EFTs) from closed accounts despite receiving notice of the accounts being closed, which resulted in borrowers being charged repeated insufficient funds fees when the preauthorized EFTs failed;
  • Charged borrowers between $3 and $15 more than the actual cost of certain services rendered by a service provider; and
  • Provided inaccurate descriptions of payment and transaction information in borrowers’ online mortgage loan accounts.

It also found that one or more mortgage servicer violated Regulation X and Regulation Z, respectively, by:

  • Failing to meet the time requirement associated with evaluating borrowers’ complete loss mitigation applications and providing a written notice stating the mortgage servicer’s determination of available loss mitigation options; and
  • Applying payments in excess of the amount due to the borrowers’ escrow accounts, as opposed to handling excess payments in accordance with the applicable requirements of Regulation Z.

Finally, it found that one or more mortgage servicer violated the Homeowners Protection Act by “fail[ing] to terminate [private mortgage insurance] on the date the principal balance of the mortgage was first scheduled to reach 78 percent loan-to-value on a mortgage loan that was current.”

For additional information regarding the above findings, along with the CFPB’s findings for other areas of consumer finance, please access a copy of the report by clicking here.