Article of the Day

CFPB Issues Proposal to Place New Standards on Mortgage Statements

02/14/2012 By: Esther Cho 

The Consumer Financial Protection Bureau (CFPB) is looking to propose a rule to standardize monthly mortgage statements to make them easier for customers to understand.

The CFPB recently released an early draft of a statement and is seeking feedback.
“This draft statement shows consumers the breakdown of their mortgage payments – what money goes to the loan principal, interest, and fees,” CFPB director Richard Cordray said in a statement. “This information will help consumers stay on top of their mortgage costs and hold their mortgage servicers accountable for fixing errors that crop up.”

The draft is available online, and opinions on the draft can be shared by emailing MortgageStatement@cfpb.gov.
Under section 1420 of the Dodd-Frank Act, statements must include certain information including:

• Principal loan amount
• Current interest rate
• Date on the interest rate may next reset
• Description of any late payment fees and any prepayment fee
• Information about housing counselors
• Phone number and email address for borrower to obtain information about the mortgage
• Other information the CFPB may prescribe in regulation

“Most servicers have spent years customizing the mortgage statements they send to their customers,” Ghazale Johnston, senior executive of Accenture Credit Services, said in an email. “Moving to a new set of statement standards may require them to make a significant investment in changing their core systems.”
Once a refined prototype is available, the CFPB said in statement that it will propose a rule to specify what needs to be on statements, but creditors, assignees, and servicers will have some flexibility to tweak the form after final publication of the rule and form.