The Consumer Financial Protection Bureau yesterday published another breadcrumb in its fight against junk fees, pointing out the illegal fees that are being charged by mortgage servicers in an Supervisory Highlights bulletin. Similar to debt collectors, because consumers have no choice over which company services their mortgages, the CFPB is putting the practice under the microscope to keep consumers from being taken advantage of.
Among the questionable or illegal fees identified by the CFPB during its examinations of mortgage servicing operations are:
- Charges for property inspections that should not have been conducted
- Assessing unauthorized late fees
- Failing to waive fees after accepting a loan modification application
The CFPB also noted that servicers failed to provide adequate descriptions of fees in statements that were sent to consumers and failed to make timely disbursements from escrow accounts. Servicers were also found to be sending deceptive delinquency notices to consumers. Consumers were being notified that they had missed payments and should fill out loss mitigation applications when the consumers did not need to make a payment because they were current, they were on a trial modification plan, or had an inactive loan. The misrepresentations could lead consumers to fill out loss mitigation applications unnecessarily.
Servicers were also found to have sent notifications to consumers about the receipt of loss mitigation applications, but failing to specify if the applications were complete or incomplete.
Under Regulation X, servicers are required to make good faith efforts to get in touch with a delinquent homeowner no later than the 36th day of delinquency. In hundreds of cases, though, examiners at the CFPB found cases where that did not happen.
