The Consumer Financial Protection Bureau (CFPB) has issued a report detailing mortgage servicing problems at banks and nonbanks.
The Consumer Financial Protection Bureau (CFPB) has issued a report detailing mortgage servicing problems at banks and nonbanks. The report also found that many nonbanks lack robust systems for ensuring they are following federal laws.
“Our examinations of banks and nonbanks allow us to correct problems before more consumers are affected,” said CFPB Director Richard Cordray. “Today’s report highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are following federal law. Fixing both is a priority for us.”
The Supervisory Highlights report is available online.
In other CFPB news, the agency filed a lawsuit in federal district court yesterday against a Nevada corporation, Morgan Drexen, Inc., and its president and chief executive officer, Walter Ledda, for charging illegal upfront fees and deceiving consumers. The company falsely claims that it does not charge consumers upfront fees for debt-relief services and falsely represents to consumers that they will become debt free in months if they work with Morgan Drexen.
The CFPB alleges that the defendants have violated the Telemarketing Sales Rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Telemarketing Sales Rule prohibits deception in telemarketing. It also generally prohibits debt-relief providers from charging a fee for any debt-relief service until it has actually settled, reduced, or otherwise altered the terms of at least one of the consumer’s debts. The Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits deceptive acts or practices in the consumer financial marketplace.
A copy of the complaint is available on the CFPB website.