CFPB Issues Guidance on Servicing Transfer Process
The Consumer Financial Protection Bureau (CFPB) published a compliance bulletin and policy guidance pertaining to residential mortgage loan servicing transfers with the intent of providing clarity, enhancing compliance, and preventing harm to consumers. The Bureau based its guidance on examination findings of inadequate policies and procedures related to the transfer of information between servicers, and stresses the importance of servicers ensuring that loans servicing continues uninterrupted after a transfer occurs between servicers. The guidance covers pre-transfer planning and post-transfer monitoring procedures that servicers should consider adopting based on their portfolio characteristics.
The guidance covers many aspects of servicing transfers and the type of information that must be shared between the transferor servicer and the transferee servicer. Proctor would like to draw your attention to Appendix A, which specifically references a list of data elements applicable to hazard and flood insurance policies. Appendix A is provided as a guide for servicers to assess their transfer-related policies and procedures, which should be based on the servicer’s portfolio composition and complexity.