US stiffens mortgage rules
The Consumer Financial Protection Bureau (CFPB) will announce greater protection for mortgage borrowers in difficulty – for example, mortgage servicers who collect repayments will not be allowed to instigate the repossession process until a borrower has missed at least 120 days’ worth of payments.
Sloppy practices by mortgage servicers have been widely criticised in the US, particularly widespread industry practices such as “robosigning”, a term used for the mass production of false legal documents related to mortgage foreclosures created by people without knowledge of the facts.
“For many borrowers, dealing with mortgage servicers has meant unwelcome surprises and constantly getting the runaround,” CFPB director Richard Cordray said in a statement.
“Our rules ensure fair treatment for all borrowers and establish strong protections for those struggling to save their homes,” he said.
The rules take effect next January.