The


Consumer
Financial
Protection
Bureau
(CFPB)
on
Wednesday
released
a

new
edition
of
its
Supervisory
Highlights
publication,
which
includes
the
agency’s
actions
to
combat
what
it
calls
“junk
fees
charged
by

mortgage
servicers,
as
well
as
other
illegal
practices.”

Examinations
conducted
by
the
bureau
found
mortgage
servicers
levied
charges
it
deems
“illegal,”
including
prohibited
property
inspection
fees,
the
issuance
of
“deceptive”
notices
to
borrowers,
and
violations
of

loss-mitigation
rules.
Financial
institutions
refunded
these
fees
to
borrowers
based
on
CFPB
findings
and
“stopped
their
illegal
practices,”
the
agency
said.

“Homeowners
cannot
just
simply
switch
providers
if
their
mortgage
servicer
charges
them
illegal
junk
fees,“
CFPB
Director

Rohit
Chopra
said
in
a
statement
accompanying
the
new
publication.
“Since
mortgage
borrowers
are
captive
to
a
company
they
never
chose
to
do
business
with,
we
are
working
hard
to
detect
and
deter
violations
of
law.”

In
addition
to
these
findings,
the
bureau
also
claims
that
certain
mortgage
servicers
failed
to
waive
certain
late
fees
and
penalties
that
stem
from
challenges
faced
by
borrowers
during
the

COVID-19
pandemic.
The
agency
also
asserted
that
deadlines
to
pay
property
taxes
and
homeowners
insurance
were
impacted.

“Mortgage
servicers
that
accepted
or
required
money
from
borrowers
to
pay
taxes
and
insurance
failed
to
make
those
payments
in
a
timely
manner,
which
caused
some
borrowers
to
incur
penalties,”
the
bureau
stated.
“Servicers
only
took
responsibility
for
those
penalties
for
missed
on-time
payments
if
homeowners
submitted
complaints.”

Among
the
allegedly
deceptive
notices
sent
to
borrowers
include
statements
that
certain
borrowers
in
financial
distress
“had
been
approved
for
a
repayment
option,”
when
the
reality
was
that
“no
final
decisions
had
been
made,
and
some
of
the
homeowners
were
ultimately
rejected.”

CFPB
examiners
also
found
servicers
sent
some
homeowners
“false
notices
saying
that
they
had
missed
payments
and
should
apply
for
repayment
options,”
and
that
servicers
also
“improperly
denied
requests
for
help
and
failed
to
evaluate
struggling
borrowers
for
repayment
options
as
required
under
the
CFPB’s
mortgage
servicing
rules.”

The
bureau
added
that
mortgage
servicers
are
taking
corrective
actions,
including
changes
to
certain
policies
and
procedures.
Servicers
are
also
providing
refunds
for
any
issues
related
to
fees,
the
agency
said.

“The
CFPB
has
been
looking
at
ways
to
streamline
mortgage
servicing
rules,
while
making
sure
mortgage
servicers
fulfill
their
obligations
to
treat
homeowners
fairly,”
the
bureau
added.

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