The Consumer Financial Protection Bureau will require underperforming servicers to document the technology and process changes used to implement the agency's recently released servicing regulations.
Noting the investments some mortgage servicers are making to improve operations, CFPB Director Richard Cordray said technology deficiencies and inadequate processes that were exposed during the foreclosure crisis are still rampant at many organizations.
"In certain circumstances, we will require specific and credible plans on how their information technology systems will be upgraded," Cordray said during a speech Tuesday at the Mortgage Bankers Association's Annual Convention in Boston.
Cordray did not provide specifics about what criteria the bureau would use to determine which servicers will received added scrutiny. However, he said the CFPB considers the procedures servicers have in place to respond to complaints a "basic component of a compliance management system," and he cautioned servicers to take that responsibility seriously.
The CFPB in August issued a final rule for mortgage servicers that provides greater protections to struggling borrowers, surviving family members and borrowers in bankruptcy.
Cordray took a more conciliatory tone when addressing lenders' implementation of the "Know Before You Owe" disclosure rules, also known as TRID, which took effect a year ago, citing an overall reduction in the number of loans experiencing disclosure-related issues. He said the new forms have provided "more convenience and insight for consumers."
"Our initial examinations show, as we expected, that lenders have in fact been making good faith efforts to follow the rules and consumers are receiving accurate and timely disclosures," Cordray said.
