The Consumer Financial Protection Bureau (CFPB) has released a new report that states a number of mortgage servicers have failed to follow the guidelines that were put in place following the housing crisis to protect borrowers and lenders alike. These new rules have been in place since early 2014, and while many lenders have followed them as required, some actually give homeowners information that is wrong or fail to give them any of the required details. These errors and lack of information are often blamed on the lack of technology.
The results came after a number of loan servicer investigations the CFPB began in January 2014 and continued up through April 2016. The results show that the information borrowers received about their loan modifications was at times late, wrong, or deceptive in some manner. The report also showed that borrows often felt that they were not getting a straight answer from customer service, especially when loans were transferred from one servicer to another.
One particular issue is the compatibility of databases and other programs. Borrowers often found that their new loan servicer was unable to pull up their full file due to such an incompatibility.
Richard Cordray, Director of the CFPB, stated that these servicers needed to stop hiding behind outdated systems and incompatible technology. They must "step up and make the investments necessary to do their jobs properly and legally," Cordray stated.