Comments on Mortgage Servicing Rules
In compliance with the Dodd-Frank Act, the Bureau of Consumer Financial Protection has proposed mortgage regulations to address many of the concerns from the subprime mortgage crisis. Policy Integrity submitted comments to the Bureau on two mortgage servicing rules: (1) the RESPA Rule, which lays out requirements for how servicers must interact with the homeowners whose mortgages they service and (2) the TILA rule, which describes certain disclosures that mortgage servicers must send to their customers at particular points.
Our recommendations to the Bureau for maximizing net social benefits include ensuring that regulatory goals are clearly defined in order to be able to successfully evaluate the effectiveness of different policy alternatives in meeting those goals and assess the performance of the rules on an ongoing basis. The Bureau should also consider ways to improve the disclosures themselves, such as whether to conduct additional consumer testing, whether to adjust the timing of the notices, and whether to add more balanced information regarding the initial interest rate adjustment disclosure. We also urge the Bureau to conduct retrospective analysis of the regulations to determine their effectiveness on an ongoing basis and how they might be improved.