Mortgage servicing will be one of the Consumer Financial Protection Bureau's top priorities when it opens for business on July 21, an agency official told Congress today.
Raj Date, associate CFPB director for markets and regulation, said the agency "will use its authorities to help ensure that all mortgage servicers have adequate systems and procedures to ensure compliance with federal law." The bureau will work with HUD, banking regulators and the Treasury Department to prepare national mortgage servicing standards, he told a House Financial Services subcommittee hearing.
Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said the standards would require applying borrower payments to principal, interest, taxes and insurance before fees; give borrowers adequate notices about late payments and delinquencies; set a single point of contact for borrowers to get questions answered; require prompt responses to borrower complaints; and require good faith efforts to modify delinquent loans and prevent foreclosures.
Foreclosure rules eased for jobless - Beginning on August 1, the Federal Housing Administration will give out-of-work homeowners a full year of forbearance on their mortgage payments, up from a current forbearance period of three to four months.
"Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home," said Housing and Urban Development Secretary Shaun Donovan.
The year-long forbearance period is required for mortgage loan servicers participating in the government's Home Affordable Modification Program (HAMP).
Whistleblower rules boost insurance sales - The new whistleblower rules offering generous bounties for tips about corporate fraud are also creating a lucrative business for insurors to sell more director and officer (D&O) insurance coverage to companies, says Forbes commentator Richard Levick.
The Dodd-Frank law requiring the whistleblower rules has transformed the D&O insurance market, which now sees a "rich opportunity to sell high-volume coverage" to large numbers of companies, Levick quotes one industry expert as saying. However, companies can negotiate discounts for the insurance coverage if they beef up their own internal programs encouraging employees to report suspected fraud.
Whistleblower complaint - A former portfolio manager at Fred Alger Management Inc. filed suit in federal court in New York alleging that the company fired her after she complained about its unfair practices, the Wall Street Journal reports.
The case is among the first filed since last year's Dodd-Frank law, which prohibits companies from retaliating against whistleblowers. Roseanne Ott, a former fund manager, alleged that the Alger chief executive had an unfair trading edge by "front-running" the health sciences fund that she managed. Ott, a nine-year employee at Alger, said she was required to seek permission from other portfolio managers before she could execute trades for her fund, which suffered as a result.