The housing crisis of 2007-2008 pummeled home prices and tossed millions of people out of their homes because they couldn't make their mortgage payments. Home prices and sales have rebounded and foreclosures have declined since then, but now there are signs that the recovery may be faltering.
The New York Times reported this week that the same abuses by lenders and mortgage servicers that led to massive foreclosures during the housing crisis are creeping back into the market.
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Steven Antonakes, the deputy director of the Consumer Financial Protection Bureau, told an industry meeting of servicers Wednesday that he remains "deeply disappointed by the lack of progress the mortgage servicing industry has made" despite "some improvements," according to American Banker.
David Stevens, chief executive of the Mortgage Bankers Association, which hosted that meeting, told The Daily Ticker that he can't speak directly to the Times story but he's "sure this new set of allegations...will be looked into" and that they reflect "past practice."
As for the future, Stevens says new national rules for mortgage servicers created by the Consumer Financial Protection Bureau (which took effect mid-January) provide consumers "the strongest set of protections...in housing finance in decades."
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Among the new requirements: loan servicers must send borrowers monthly statements and credit payments the day they're received and they must contact borrowers if they're 36 days late on payments. Foreclosure filings must be delayed until a loan modification is underway or until a borrower is more than 120 days late.
"Servicers have had more than a year now to work on implementation [of the rules]," Antonakes told the Mortgage Bankers Association meeting. He warned that the CFPB would be paying "exceptionally close attention" to compliance with the new rules when loans are transferred from one servicer to another.
"There will be no more shell games where the first servicers says the transfer ended all of its responsibility to consumers and the second servicer says it got a data dump missing critical documents," Antonakes said.
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