New Rules Aim for Greater Transparency with Mortgages
New Rules Aim for Greater Transparency with Mortgages
The Consumer Financial Protection Bureau recently proposed new rules for mortgage servicers to help borrowers get more information about their mortgages.
Among the new guidelines proposed: Mortgage servicers would be required to give borrowers more information on outstanding balances and pending interest rate changes. Also, servicers would be required to respond to borrowers’ calls for information or complaints about possible errors within five days.
The proposed rules would require servicers to make several additions to the bills that they send home owners, including clearly showing payments by principal, interest, fees, and escrow as well as the amount and due date of the next payment. If a home owner has an adjustable rate mortgage, servicers must notify home owners of any potential changes to the interest rate at least seven months prior. Also among the proposed rule changes, servicers would be required on the day they receive payment to credit a home owners’ mortgage account.
"We want to make sure that at all times consumers can get information about how much they owe, what they are paying, and how their payments are being applied," says Richard Cordray, the director of CFPB. "And if consumers fall behind on their mortgage, we want them to know how to assess their options and take action."
The bureau hopes the rules can take effect by January. The public can submit comments to the bureau on the proposed rules until Oct. 9.
Source: “New Rules Aimed at Helping Home Owners,” CNNMoney (Aug. 10, 2012)
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