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What's Happening Now

August 21, 2012 9:53 pm

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.

August 21, 2012 11:08 pm

Terms like “unreasonable volume of documents…” or “unduly burdensome…” or “unreasonable costs…” without specific definitions will foster a virtual loop hole for servicers so avoid responding to consumer requests for information by simply making a subjective decision that the consumer’s request is “unreasonable” “overburdensome” etc. Once again it leaves the consumer without any real teeth to get results. Also, the limitation of 1 year after loan was transferred or paid off is too short of a period of time. Currently, many consumers are not made aware of the error until they seek to buy a new home oftentimes many years later. The credit reporting of the mortgage loan is often done so with errors such as a reported… more »

…“foreclosure” or “paid for less than full balance” or ” settled” when that may not be the case. It may be several years before the consumer is made aware of the error. Many regulated industries require entities to maintain records for 7 years. Why not allow the consumer 7 years to request information. This would be consistent with the time period for credit reporting of most inaccurate credit items. « less
August 22, 2012 10:39 am

Welcome to Regulation Room, reneydubose, and thanks for your comment. CFPB wants to make it easier for borrowers to get information from their servicers while also making sure that servicers won’t be overwhelmed with information requests. You can learn more about CFPB’s definitions of the terms you are concerned about here. What would you like to see added to these definitions to make it harder for servicers to avoid information requests?

August 22, 2012 11:23 am

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?

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