Associated Press
Friday, August 10, 2012
WASHINGTON — The government's consumer lending watchdog proposed new rules Friday aimed at protecting homeowners from unexpected costs and shoddy service by companies that collect their monthly mortgage payments.
Mortgage servicing companies would be required to provide clear monthly billing statements, warn borrowers before interest rate hikes kick in and actively help them avoid foreclosure under the proposal by the Consumer Financial Protection Bureau. The rules also require companies to credit people's payments promptly, swiftly correct errors and keep better internal records.
"The major failures in this industry demonstrate that all servicers need to meet basic standards of good customer service," CFPB director Richard Cordray said. He said the proposal reflects "two basic, common-sense standards — no surprises and no runarounds."
Mortgage servicers are central players in the nationwide housing crisis because they are responsible for foreclosing on homes when people fail to make ...