On November 10, 2021, the CFPB, Federal Reserve, FDIC, NCUA, OCC, and state financial regulators issued a joint statement to mortgage servicers that the agencies would begin enforcing certain timing requirements under mortgage servicing regulations. The announcement walks back flexibility provided by a prior announcement in April 2020, which stopped enforcement efforts for servicers who took good faith efforts to comply with servicing timing requirements.
The April 2020 joint statement announced that the agencies would not take supervisory or enforcement action against mortgage servicers that made good faith efforts to comply with requirements under Regulation X including, (1) “sending . . . loss mitigation-related notices, (2) “establishing or making good faith efforts to establish live contact with delinquent borrowers[,]” and (3) “sending the written early intervention notice to delinquent borrowers[.]” WBK’s prior coverage of the April 2020 Joint Statement is available here.
The agencies no longer believe it is necessary to offer the same flexibility since more than 18 months have passed since April 2020 and “servicers have had sufficient time to adjust their operations[.]” Thus, the agencies will begin addressing violations of Regulation X mortgage servicing rules occurring after November 10, 2021. Although the agencies are restarting enforcement and supervision efforts, they note that servicers will have some flexibility in appropriate circumstances. Decisions regarding supervisory and enforcement actions will consider, based on the discretion of the agency, challenges servicers may experience from COVID-19, including operational changes caused by the November 2021 Joint Statement.