Comments on: For All Borrowers: Getting Errors Fixed

By: Moderator

Moderator — Tue, 25 Sep 2012 04:28:30 +0000

Welcome to Regulation Room, nadondavis, and thank you for your comment. The transparency of fees related to escrow accounts is not covered in this proposed rule, but you can use CFPB's complaint form to tell them more about the problems you faced. However, failing to pay insurance premiums on time through an escrow account would be covered under CFPB’s proposed list of errors. Do you think CFPB’s proposal does enough to address errors like this?

By: nadondavis

nadondavis — Tue, 25 Sep 2012 01:54:08 +0000

24 CFR 3500.17(C) should be amended to explicitly prohibit collection of an amount greater than that needed to pay taxes and insurance. CHASE is demanding that the impound account balance equal a MINIMUM of the amounts needeed PLUS a two month impound account cushion AT ALL TIMES. This equates to an interest free loan to the servicer for the life of the loan. AND CHASE THREATENED TO FORECLOSE after admitting the money was not needed to pay the impounds. This is extortion. I would be happy to share my lenghthy correspondence with Chase over this. I then refinanced.

FAILURE TO PAY IMPOUND EXPENSES: A prior lender, Bank of America let my homeowners’ insurance lapse — despite collecting the money, and my forwarding 3 notices that the insurance would be, and then was being… more »

…cancelled for non-payment. After it was cancelled, B of A said that I would have to pay to reinstate, and they would eventually reimburse me. There needs to be a penalty for EVERY TIME this occurs. I refinanced. « less

By: Moderator

Moderator — Thu, 13 Sep 2012 15:34:05 +0000

Hi kaz2700, welcome to Regulation Room. We're sorry to hear that you're having a difficult time communicating with your bank. You may want to contact CFPB's complaint center or a HUD approved housing counselor to see if they can help. You might also want to check out the post on reliable contact with people who can help to see if CFPB's recommendations would do enough to help in your situation.

By: kaz2700

kaz2700 — Thu, 13 Sep 2012 11:09:48 +0000

I recently refied a mortgage through a small firm in Charlotte, NC. They informed me that my mortgage would be sold. During the waiting period, I had to make payments to them and the payments were recorded correctly without any problem. Approximately 30 days ago, I received a letter from Citi that they bought my mortgage. The balance stated was wrong as I had made extra principle payments. I then received a statement from them and the history of the account was totally blank other than one payment. I have called Citi and talked with Supervisors in their Tuscon office. I was informed that it was my problem and I should have not made the payments to the Charlotte Company. It is my understanding from the Citi letter that any payment made before 9/1/12, the payment was to go to the Charlotte… more »

…Company. Looking at my mortgage balance on the Citi website, Citi is showing a mortgage balance of close to $10,000. more than what is owed. I have even faxed them the history from the Charlotte Company for them to check and review the problem. Nothing has been done. No phone calls, no email, no acknowledgement by Citi of the reported problem. In today’s world where banks can post transactions daily, provide ACH transfers, allow high frequency trading, why is it so hard for someone at Citi to pick up the phone and resolve this issue. The system is broken and the link is that big banks can not perform simple functions. « less

By: Sean Erwin

Sean Erwin — Thu, 30 Aug 2012 02:29:39 +0000

Thank you Moderator. I am but one consumer, one data point, and hesitant to extrapolate my experience into public policy proposals. But ARMs are indeed confusing, and there is a great variety of types of ARMs. My experience is that a mortgage servicer will seek to interpret an ARM’s language to its greatest benefit. One way this is done, in my experience, is to incorrectly calculate an interest rate at a change date. I would be happy to see another error added to better address interest rate disputes, as this may well be one type of deceptive practice the industry employs.

By: Moderator

Moderator — Tue, 28 Aug 2012 22:27:33 +0000

Seanerwin, welcome to Regulation Room and thank you for sharing your experience. Do you think CFPB should add another error to the covered error list to better address interest rate disputes? You might also want to read what CFPB says about adjustable rate mortgages

By: Sean Erwin

Sean Erwin — Tue, 28 Aug 2012 20:03:33 +0000

I am a consumer with an usual mortgage where the interest rate is 8.05% for the first 5 years and then adjusts to LIBOR + 2.25% rounded to the nearest .125%. The first adjustment date is Sep 1 2012. After the first adjustment date, subsequent adjustments are subject to a 2% interest rate change cap.

The loan servicer, Green Tree, maintains that the 2% interest rate change cap also applies to the first change date, despite the fact that the mortgage documentation clearly states otherwise. In other words, Green Tree states that the new rate will fall to 6.05% on 9/1/2012, when in fact it should fall to 3%.

I have filed a complaint with the CFPB which has been forwarded to Green Tree, and we await their reply. Thank you very much for your service!

My comment is: When calling Green Tree… more »

…to discuss the dispute outlined above, their customer service representatives are quite clearly trained to argue with the consumer. They are not forthcoming with the fact that Green Tree will only act on disputes when they are submitted in writing, to a fax number that is not published on its web site or its mortgage statements.

I don’t know if Green Tree is a “small servicer”, but clearly their practice is to deflect and obfuscate any attempt by their customers to obtain a response to a concern, and to act by the letter of the law and not its spirit, when profits are in any way at stake. I applaud these proposed rules and thank you for allowing the public to comment so easily. « less

By: Moderator

Moderator — Wed, 22 Aug 2012 15:23:14 +0000

Thanks for your comment, reneydubose. To ensure that lenders make a good faith effort to determine whether an error exists and fix the error, CFPB is proposing that lenders turn over all documentation used to make their determination to the borrower. Do you think this is sufficient to safeguard against your concerns about ambiguity? What would you like to see required for a reasonable investigation?

By: reneydubose

reneydubose — Wed, 22 Aug 2012 01:53:44 +0000

Consumers are already challenged in their efforts to get the credit reporting agencies to resolve errors on their credit report. One of the main reasons for this is the failure of the Fair Credit Reporting Act to define “reasonable investigation”. I would hate to see the same problem repeated in the rule making for mortgage servicers. I believe it would beneficial for the new rules to provide a minimum definition of “reasonable investigation” so there is no room for ambiguity or conflicting expectations.

By: Brian Penny

Brian Penny — Tue, 14 Aug 2012 18:19:02 +0000

The cost to enter the market or remain in the market shouldn’t be a consideration. That’s all between the investor and the servicers. If the investor (largely FNMA & FMAC) want to provide options for smaller servicers, that is up to their discretion.

If you leave a small servicer exception, it will be used as a loophole for the larger banks to create subsidiaries and exploit these, much like they do with taxes.

If a company in any industry can’t handle the costs of that industry, then they have no business being in that industry. If there ends up not being enough servicers to service the loans, then that’s something the investors need to look at. From my perspective, you’re trying to fix the effects rather than the cause.