Consumer watchdog warns Mortgage Servicers on TransfersSubmitted by bobbyw24 on Mon, 02/11/2013 - 16:16
(Reuters) - The consumer financial watchdog on Monday warned mortgage servicers that they must extend legal protections to customers when transferring their loans to another company, and said it will pursue enforcement actions against those who do not comply.
The Consumer Financial Protection Bureau issued a bulletin reminding servicers that they should not lose paperwork or compromise troubled borrowers' chances of avoiding foreclosure.
The warning comes as many big banks are deciding that collecting mortgage payments on some loans is too costly, and are unloading these assets. New capital rules do not give as much credit to mortgage servicing rights, and heightened regulatory scrutiny have made the assets less desirable.