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CFPB's Assault on Junk Fees Spreads to Mortgage Servicing

Michael Christians • May 01, 2024

On April 25th, the Consumer Financial Protection Bureau (CFPB) issued the 33rd edition of its Supervisory Highlights publication. This issue highlighted certain unfair, deceptive, or abusive acts and practices and other regulatory violations related to mortgage servicing.

First, examiners found that certain servicers unfairly charged late fees that exceeded the amount allowed for in the underlying loan agreement. Second, mortgage servicers failed to adequately describe fees on a borrower’s periodic statement as required by Regulation Z. Third, servicers failed to make timely payments out of a borrower’s escrow account, resulting in those borrowers incurring penalties due to late payments. Finally, examiners found that mortgage servicers engaged in deceptive acts and practices by sending inaccurate loss mitigation eligibility and/or delinquency notices.

You can access the CFPB's latest Supervisory Highlights here.

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