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CFPB Clarifies Frequency of Early Intervention Notices
Monday, September 19, 2016 6:50 AM

The new mortgage servicing rule from the Consumer Financial Protection Bureau clarifies the frequency of required written early intervention notices. A mortgage servicer must provide a written notice to a delinquent borrower no later than the 45th day of the borrower’s delinquency but is not required to send the notice more than once in any 180-day period.

The new rule clarifies that:

  • If a borrower is 45 days or more delinquent at the end of any 180-day period after the servicer has provided the written notice, a servicer must provide the written notice again not later than 180 days after providing the prior written notice; and
  • If a borrower is less than 45 days delinquent at the end of any 180-day period after the servicer has provided the written notice, a servicer must provide the written notice again no later than 45 days after the delinquent payment due date.

The rule also includes new examples in the official interpretation to the rule, which further illustrate the written notice requirements.

  • Servicing transfers: The rule clarifies that a transferee servicer is required to comply with the written notice requirements regardless of whether the transferor servicer provided a written notice to the borrower in the preceding 180-day period. However, if the transferor provided the written notice within 45 days of the transfer date, the transferee servicer is not required to provide another written notice until 45 days after the first post-transfer payment due date; and 
  • Successors in interest: Confirmation of a successor in interest does not restart the 180-day period if the prior notice triggering the 180-day waiting period was provided to a transferor borrower. The CFPB has recognized that this would be unnecessarily burdensome and a confirmed successor in interest may obtain information from mortgage servicers using a request for information, to which servicers must respond.

Source: CUNA CompBlog