Request for Information Regarding 2013 Real Estate Settlement Procedures Act Servicing Rule Assessment, 21952-21956 [2017-09361]
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21952
Proposed Rules
Federal Register
Vol. 82, No. 90
Thursday, May 11, 2017
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1024
[Docket No. CFPB–2017–0012]
Request for Information Regarding
2013 Real Estate Settlement
Procedures Act Servicing Rule
Assessment
Bureau of Consumer Financial
Protection.
ACTION: Notice of assessment of 2013
RESPA servicing rule and request for
public comment.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is
conducting an assessment of the
Mortgage Servicing Rules Under the
Real Estate Settlement Procedures Act
(Regulation X), as amended prior to
January 10, 2014, in accordance with
section 1022(d) of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act. The Bureau is requesting public
comment on its plans for assessing this
rule as well as certain recommendations
and information that may be useful in
conducting the planned assessment.
DATES: Comments must be received on
or before: July 10, 2017.
ADDRESSES: You may submit comments,
identified by Docket No. CFPB–2017–
0012, by any of the following methods:
• Electronic: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: FederalRegisterComments@
cfpb.gov. Include Docket No. CFPB–
2017–0012 in the subject line of the
email.
• Mail: Monica Jackson, Office of the
Executive Secretary, Consumer
Financial Protection Bureau, 1700 G
Street NW., Washington, DC 20552.
• Hand Delivery/Courier: Monica
Jackson, Office of the Executive
Secretary, Consumer Financial
Protection Bureau, 1275 First Street NE.,
Washington, DC 20002.
Instructions: All submissions should
include the document title and docket
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SUMMARY:
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number. Because paper mail in the
Washington, DC area and at the Bureau
is subject to delay, commenters are
encouraged to submit comments
electronically. In general, all comments
received will be posted without change
to https://www.regulations.gov. In
addition, comments will be available for
public inspection and copying at 1275
First Street NE., Washington, DC 20002
on official business days between the
hours of 10 a.m. and 5 p.m. Eastern
Time. You can make an appointment to
inspect the documents by telephoning
(202) 435–7275.
All comments, including attachments
and other supporting materials, will
become part of the public record and
subject to public disclosure. Sensitive
personal information, such as account
numbers or Social Security numbers,
should not be included. Comments
generally will not be edited to remove
any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Erik
Durbin, Senior Economist; Laura A.
Johnson, Senior Counsel; Laurie
Maggiano, Servicing and Secondary
Markets Program Manager; Division of
Research, Markets, and Regulations at
(202) 435–9243.
SUPPLEMENTARY INFORMATION:
I. Background
Congress established the Bureau in
the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank
Act).1 In the Dodd-Frank Act, Congress
generally consolidated in the Bureau the
rulemaking authority for Federal
consumer financial laws previously
vested in certain other Federal agencies.
Congress also provided the Bureau with
the authority to, among other things,
prescribe rules as may be necessary or
appropriate to enable the Bureau to
administer and carry out the purposes
and objectives of the Federal consumer
financial laws and to prevent evasions
thereof.2 Since 2011, the Bureau has
issued a number of rules adopted under
Federal consumer financial law.3
Section 1022(d) of the Dodd-Frank
Act requires the Bureau to conduct an
assessment of each significant rule or
order adopted by the Bureau under
Federal consumer financial law. The
Bureau must publish a report of the
1 Public
Law 111–203, 124 Stat. 1376 (2010).
U.S.C. 5512(b)(1).
3 12 U.S.C. 5512(d).
2 12
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assessment not later than five years after
the effective date of such rule or order.
The assessment must address, among
other relevant factors, the rule’s
effectiveness in meeting the purposes
and objectives of title X of the DoddFrank Act and the specific goals stated
by the Bureau. The assessment must
reflect available evidence and any data
that the Bureau reasonably may collect.
Before publishing a report of its
assessment, the Bureau must invite
public comment on recommendations
for modifying, expanding, or
eliminating the significant rule or order.
In January 2013, the Bureau issued
the ‘‘Mortgage Servicing Rules Under
the Real Estate Settlement Procedures
Act (Regulation X)’’ (2013 RESPA
Servicing Final Rule).4 The Bureau
amended the 2013 RESPA Servicing
Final Rule on several occasions before it
took effect on January 10, 2014.5 As
discussed further below, the Bureau has
determined that the 2013 RESPA
Servicing Final Rule and all the
amendments related to it that the
Bureau made that took effect on January
10, 2014 collectively make up a
significant rule for purposes of section
1022(d). The Bureau will conduct an
assessment of the 2013 RESPA Servicing
Final Rule as so amended, which this
document refers to as the ‘‘2013 RESPA
Servicing Rule.’’ In this document, the
Bureau is requesting public comment on
the issues identified below regarding the
2013 RESPA Servicing Rule.
II. Assessment Process
Assessments pursuant to section
1022(d) of the Dodd-Frank Act are for
informational purposes only and are not
part of any formal or informal
rulemaking proceedings under the
Administrative Procedure Act. The
Bureau plans to consider relevant
comments and other information
received as it conducts the assessment
4 78 FR 10695 (Feb. 14, 2013). In January 2013,
the Bureau also issued separate ‘‘Mortgage
Servicing Rules Under the Truth in Lending Act
(Regulation Z)’’ (2013 TILA Servicing Final Rule).
78 FR 10901 (Feb. 14, 2013). As discussed below,
the Bureau has determined that the 2013 TILA
Servicing Final Rule is not a significant rule (either
individually or collectively with any amendments
to the 2013 TILA Servicing Final Rule that took
effect on January 10, 2014) for purposes of DoddFrank Act section 1022(d). Therefore, the Bureau is
not seeking comment on the 2013 TILA Servicing
Final Rule or its related subsequent amendments in
this document.
5 See infra note 9.
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and prepares an assessment report. The
Bureau does not, however, expect that it
will respond in the assessment report to
each comment received pursuant to this
document. Furthermore, the Bureau
does not anticipate that the assessment
report will include specific proposals by
the Bureau to modify any rules,
although the findings made in the
assessment will help to inform the
Bureau’s thinking as to whether to
consider commencing a rulemaking
proceeding in the future.6 Upon
completion of the assessment, the
Bureau plans to issue an assessment
report no later than January 10, 2019.
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III. The 2013 RESPA Servicing Rule
Congress adopted the Dodd-Frank Act
in response to an unprecedented cycle
of expansion and contraction in the
mortgage market that sparked the most
severe U.S. recession since the Great
Depression. In the Dodd-Frank Act,
Congress enacted a number of new
provisions governing the origination
and servicing of consumer mortgages.
Beginning in 2013, the Bureau issued
several final rules to implement these
new statutory provisions. Those rules
generally took effect in January 2014.
In January 2013, the Bureau issued
the 2013 RESPA Servicing Final Rule.7
The 2013 RESPA Servicing Final Rule
contained a number of new borrower
protections, which are summarized
below. After finalizing the rule,
consistent with its obligations under
section 1022(c) of the Dodd-Frank Act,
the Bureau continued to monitor the
mortgage servicing market and consider
whether changes to the 2013 RESPA
Servicing Final Rule were appropriate.8
6 The Bureau announces its rulemaking plans in
semiannual updates of its rulemaking agenda,
which are posted as part of the Federal
government’s Unified Agenda of Regulatory and
Deregulatory Actions. See Off. of Info. and Reg.
Affairs, Off. of Mgmt. and Budget, Current
Regulatory Plan and the Unified Agenda of
Regulatory and Deregulatory Actions, https://
www.reginfo.gov/public/do/eAgendaMain (last
visited Mar. 22, 2017).
7 78 FR 10695 (Feb. 14, 2013). In January 2013,
the Bureau also issued the 2013 TILA Servicing
Final Rule. 78 FR 10901 (Feb. 14, 2013). The Bureau
amended the 2013 TILA Servicing Final Rule on
several occasions before it took effect on January 10,
2014. Infra note 9. As discussed below, the Bureau
has determined that the 2013 TILA Servicing Final
Rule is not a significant rule (either individually or
collectively with any amendments to the 2013 TILA
Servicing Final Rule that took effect on January 10,
2014) for purposes of Dodd-Frank Act section
1022(d). Therefore, the Bureau is not seeking
comment on the 2013 TILA Servicing Final Rule or
its related subsequent amendments in this
document.
8 Section 1022(c) provides that, to support its
rulemaking and other functions, the Bureau shall
monitor for risks to consumers in the offering or
provision of consumer financial products or
services, including developments in the markets for
such products or services.
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During 2013, the Bureau amended the
rule to address important questions
raised by industry, consumer advocacy
groups, and other stakeholders.9 As
noted above, the effective date of the
2013 RESPA Servicing Rule, including
these amendments, was January 10,
2014.10
The 2013 RESPA Servicing Rule in
part implements section 1463 of the
Dodd-Frank Act, which amended
RESPA. Section 1463(a) imposed new
mortgage servicing requirements and
prohibitions under RESPA on servicers
of federally related mortgage loans with
respect to force-placed insurance,
borrower assertions of error, and
borrower requests for information.11 It
9 In the summer and fall of 2013 the Bureau
finalized the (1) Amendments to the 2013 Mortgage
Rules under the Real Estate Settlement Procedures
Act (Regulation X) and the Truth in Lending Act
(Regulation Z) (July 2013 Mortgage Final Rule) and
(2) Amendments to the 2013 Mortgage Rules under
the Equal Credit Opportunity Act (Regulation B),
Real Estate Settlement Procedures Act (Regulation
X), and the Truth in Lending Act (Regulation Z)
(September 2013 Mortgage Final Rule). 78 FR 44685
(July 24, 2013); 78 FR 60381 (Oct. 1, 2013). In
October 2013, the Bureau clarified compliance
requirements in relation to successors in interest,
early intervention requirements, bankruptcy law,
and the Fair Debt Collection Practices Act (FDCPA),
through an Interim Final Rule (IFR) and a
contemporaneous compliance bulletin.
Amendments to the 2013 Mortgage Rules under the
Real Estate Settlement Procedures Act (Regulation
X) and the Truth in Lending Act (Regulation Z), 78
FR 62993 (Oct. 23, 2013); Bureau of Consumer Fin.
Prot., CFPB Bulletin 2013–12, Implementation
Guidance for Certain Mortgage Servicing Rules (Oct.
15, 2013), available at https://files.consumer
finance.gov/f/201310_cfpb_mortgage-servicing_
bulletin.pdf.
10 After the January 10, 2014 effective date of the
rules described above, the Bureau made additional
changes to the rule. In October 2014, the Bureau
added an alternative definition of small servicer
that exempted nonprofit entities that meet certain
requirements from certain provisions of the 2013
RESPA Servicing Final Rule, as well as from other
requirements. Amendments to the 2013 TILA
Servicing Final Rule, 79 FR 65299 (Nov. 3, 2014).
The effective date of that rule was November 3,
2014. In August 2016, the Bureau issued numerous
additional amendments to provisions of the 2013
RESPA Servicing Final Rule. Amendments to the
2013 Mortgage Rules under the Real Estate
Settlement Procedures Act (Regulation X) and the
Truth in Lending Act (Regulation Z), 81 FR 72160
(Oct. 19, 2016). The effective dates of these
amendments are October 19, 2017 and April 19,
2018, depending on the specific requirements. In
this document, the Bureau is not seeking comment
on the amendments to the mortgage servicing rules
that became or will become effective after the
January 10, 2014 effective date of the 2013 RESPA
Servicing Rule.
11 For example, the 2013 RESPA Servicing Rule’s
force-placed insurance provisions implement
sections 6(k)(1)(A), 6(k)(2), 6(l) and 6(m) of RESPA,
which were added by section 1463 of the DoddFrank Act. The 2013 RESPA Servicing Rule’s error
resolution and information request provisions
implement section 6(k)(1)(B) through (D) of RESPA,
which was added by section 1463 of the DoddFrank Act. The Dodd-Frank Act also imposed
certain new requirements under TILA relating to
mortgage servicing, and the Bureau issued rules in
TILA’s implementing Regulation Z. As noted above
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21953
also provided the Bureau authority to
establish obligations on servicers of
federally related mortgage loans
appropriate to carry out the consumer
protection purposes of RESPA. The
Bureau also has the authority under
RESPA to prescribe such rules and
regulations, to make such
interpretations, and to grant such
reasonable exemptions for classes of
transactions as may be necessary to
achieve the purposes of RESPA.12
Accordingly, the 2013 RESPA Servicing
Rule included not only provisions that
implemented the specific Dodd-Frank
Act requirements mentioned above but
also provisions regarding servicing
policies and procedures, early
intervention with delinquent borrowers,
continuity of contact with delinquent
borrowers, and loss mitigation
procedures, as well as certain
exemptions, all of which the Bureau
found to be appropriate to carry out or
necessary to achieve the purposes of
RESPA and title X and prevent evasion
of those laws.
A. Major Provisions of the Servicing
Rule
The 2013 RESPA Servicing Rule
addressed six major topics, which are
summarized below. Many of these
requirements do not apply to small
servicers, generally defined as servicers
that service 5,000 mortgage loans or
fewer and only service mortgage loans
the servicer or an affiliate owns or
originated.13 Small servicers are exempt
from: Certain requirements relating to
obtaining force-placed insurance; the
provisions relating to general servicing
policies, procedures, and requirements;
and certain requirements and
restrictions relating to communicating
with borrowers about, and evaluation of,
loss mitigation applications.
1. Force-placed insurance. The rule
prohibits servicers from charging a
borrower for force-placed insurance
coverage unless the servicer has a
reasonable basis to believe the borrower
has failed to maintain hazard insurance
required by the loan agreement. Where
the borrower has an escrow account for
the payment of hazard insurance
premiums, the servicer is prohibited
from obtaining force-placed insurance
where the servicer can continue the
borrower’s homeowner insurance, even
if the servicer needs to advance funds to
the borrower’s escrow account to do so.
The rule also requires servicers to send
and below, the Bureau is not seeking comment on
the 2013 TILA Servicing Final Rule or its related
subsequent amendments in this document.
12 12 U.S.C. 2617(a).
13 See 12 CFR 1024.30(b)(1); 12 CFR
1026.41(e)(4).
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two notices before charging the
borrower for force-placed insurance
coverage and provides other
requirements regarding force-placed
insurance.
2. Error resolution and information
requests. The rule requires servicers to
comply with certain error resolution
procedures for written notices of error
relating to the servicing of a mortgage
loan. Servicers generally are required to
acknowledge the notice of error within
five days and to investigate and respond
in writing within 30 days, either
correcting the error or notifying the
borrower that no error occurred. Similar
procedures and timeframes apply to
servicer acknowledgment of and
response to borrower written requests
for information.
3. General servicing policies,
procedures, and requirements. The rule
requires servicers to establish policies
and procedures reasonably designed to
achieve objectives specified in the rule.
4. Early intervention with delinquent
borrowers. The rule generally requires
servicers to establish or make good faith
efforts to establish live contact with
borrowers by the 36th day of their
delinquency (for each billing cycle for
which a payment sufficient to cover
principal, interest, and, if applicable,
escrow is due and unpaid) and to
promptly inform such borrowers, where
appropriate, that loss mitigation options
may be available. In addition, servicers
must generally provide borrowers a
written notice with information about
loss mitigation options by the 45th day
of their delinquency.
5. Continuity of contact with
delinquent borrowers. The rule requires
servicers to maintain reasonable policies
and procedures with respect to
providing delinquent borrowers with
access to personnel to assist them with
loss mitigation options where
applicable.
6. Loss mitigation procedures. The
rule requires servicers to follow
specified loss mitigation procedures for
a mortgage loan secured by a borrower’s
principal residence. Servicers generally
must provide a written notice
acknowledging receipt of a borrower’s
loss mitigation application within five
days and exercise reasonable diligence
in obtaining documents and information
to complete the application. For a
complete loss mitigation application
received more than 37 days before a
foreclosure sale, the rule requires the
servicer to evaluate the borrower, within
30 days, for all loss mitigation options
available to the borrower in accordance
with the investor’s eligibility rules. The
rule also prohibits a servicer from
making the first notice or filing required
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by applicable law for any judicial or
nonjudicial foreclosure process until a
mortgage loan is more than 120 days
delinquent and places certain
restrictions on ‘‘dual tracking,’’ where a
servicer is simultaneously processing a
consumer’s loss mitigation application
at the same time that it advances the
foreclosure process.
B. Significant Rule Determination
The Bureau has determined that the
2013 RESPA Servicing Rule is a
significant rule for purposes of DoddFrank Act section 1022(d). The Bureau
makes this determination partly on the
basis of the estimated aggregate annual
cost to industry of complying with the
rule.14 The rule mandated a large
number of changes in the features of
mortgage servicing, including new
disclosures for force-placed insurance,
an expanded error resolution regime,
and new servicing procedures and
requirements that apply to all servicing
of delinquent loans, including
mandated timelines and procedural
rights in loss mitigation. These changes
in turn required multiple changes in
business operations, including
adjustments in technology, training and
compliance. The Bureau noted in the
preamble to the 2013 RESPA Servicing
Final Rule that these changes would
require servicers to make changes to
systems and procedures and that the
new requirements could require
servicers to increase staffing time
devoted to certain activities and to hire
more staff.15 Taking all of these factors
into consideration, the Bureau has
concluded that the 2013 RESPA
Servicing Rule is ‘‘significant’’ for
purposes of Dodd-Frank Act section
1022(d).
The 2013 TILA Servicing Final Rule
became effective at the same time as the
2013 RESPA Servicing Rule. The Bureau
14 In the Paperwork Reduction Act (PRA)
Analysis published with the 2013 RESPA Servicing
Final Rule, the Bureau estimated an additional
1,100,000 in ongoing burden hours (as well as an
additional 29,000 in one-time burden hours) from
the 2013 RESPA Servicing Final Rule. 78 FR 10695,
10873 (Feb. 14, 2013). In the Supporting Statement
submitted to OMB, the Bureau valued the ongoing
burden hours at $19.00 per hour. Thus, there was
approximately $20.9 million in additional ongoing
PRA burden from the 2013 RESPA Servicing Final
Rule. In addition, the Bureau estimated that the
2013 RESPA Servicing Final Rule would increase
the cost of servicing distressed loans subject to the
new requirements in ways not included in the PRA
burden, and estimated that these additional costs
would total at least $90 million. See U.S. Gov’t
Accountability Off., GAO–14–67, Dodd-Frank
Regulations: Agencies Conducted Regulatory
Analyses and Coordinated but Could Benefit from
Additional Guidance on Major Rules, at 18–19 (Dec.
11, 2013), available at https://www.gao.gov/
products/GAO-14-67.
15 See 78 FR 10695, 10847–60 (Feb. 14, 2013).
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has determined that the 2013 TILA
Servicing Final Rule is not a significant
rule (either individually or collectively
with any amendments to the 2013 TILA
Servicing Final Rule that took effect on
January 10, 2014) for purposes of DoddFrank Act section 1022(d). The rule
implemented the periodic statement
requirement created by Dodd-Frank Act
section 1420, and exempted small
servicers from this requirement. The
rule also required a new initial
adjustable-rate mortgage notice and
revised certain existing disclosures and
other servicing provisions under the
Truth in Lending Act. The estimated
cost to servicers of complying with the
rule is small, as set forth in the Bureau’s
analysis of benefits and costs that
accompanied the rule.16 In this respect,
the 2013 TILA Servicing Final Rule
generally modified important
disclosures that consumers were already
receiving, meaning that additional
ongoing costs and operational changes
to distribute the disclosures are small.17
The rule did require one-time changes
to provide additional important
information in the disclosures; 18
however, Bureau outreach generally
found that vendors would make these
changes so the one-time costs would be
spread over many entities.19 The rule’s
new disclosure requirements were
intended to help certain groups of
consumers make better decisions and
were not expected to affect competition,
innovation, or pricing in the mortgage
market. These factors lead the Bureau to
16 In the PRA Analysis published with the 2013
TILA Servicing Final Rule, the Bureau estimated an
additional 56,000 in ongoing burden hours (as well
as an additional 5,000 in one-time burden hours)
from the 2013 TILA Servicing Final Rule as well as
ongoing vendor costs of $5.7 million. 78 FR 10901,
11004 (Feb. 14, 2013). In the Supporting Statement
submitted to OMB, the Bureau valued the ongoing
burden hours at $19.00 per hour. Thus, there was
approximately $6.7 million in additional ongoing
PRA burden from the 2013 TILA Servicing Final
Rule. The Bureau’s section 1022 (b)(2) analysis
considered that covered persons might receive less
revenue through fees and charges as consumers
responded to superior disclosures, but did not
identify these costs as substantial. 78 FR 10901,
10989.
17 Consumers were already receiving the ARM
adjustment notice, and the Bureau estimated that
the new periodic statement, where required, would
for the most part replace billing statements that
consumers were already receiving. Regarding the
new initial interest rate adjustment disclosure, the
Bureau estimated that annual production and
distribution costs would be $140,000 (50 cents per
disclosure). 78 FR 10901, 10988 (Feb. 14, 2013).
18 The Bureau noted that the additional
information provided by the revised ARM
adjustment notice and new periodic statement
might require servicers (more specifically, their
vendors) to access databases that were not regularly
accessed by systems that produced the existing
disclosures. 78 FR 10901, 10984–85, 10992 (Feb. 14,
2013).
19 78 FR 10901, 10985 (Feb. 14, 2013).
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conclude that the 2013 TILA Servicing
Final Rule is not ‘‘significant’’ for
purposes of section 1022(d).
IV. The Assessment Plan
Because the Bureau has determined
that the 2013 RESPA Servicing Rule is
a significant rule for purposes of DoddFrank Act section 1022(d), section
1022(d) requires the Bureau to assess
the rule’s effectiveness in meeting the
purposes and objectives of title X of the
Dodd-Frank Act and the specific goals
stated by the Bureau. Section 1021 of
the Dodd-Frank Act states that the
Bureau’s purpose is to implement and,
where applicable, enforce Federal
consumer financial law consistently for
the purpose of ensuring that all
consumers have access to markets for
consumer financial products and
services and that markets for consumer
financial products and services are fair,
transparent, and competitive. Section
1021 also sets forth the Bureau’s
objectives, which are to ensure that,
with respect to consumer financial
products and services:
• Consumers are provided with
timely and understandable information
to make responsible decisions about
financial transactions;
• Consumers are protected from
unfair, deceptive, or abusive acts and
practices and from discrimination;
• Outdated, unnecessary, or unduly
burdensome regulations are regularly
identified and addressed in order to
reduce unwarranted regulatory burdens;
• Federal consumer financial law is
enforced consistently, without regard to
the status of a person as a depository
institution, in order to promote fair
competition; and
• Markets for consumer financial
products and services operate
transparently and efficiently to facilitate
access and innovation.
In the 2013 RESPA Servicing Rule, the
Bureau stated that, considered as a
whole, RESPA, as amended by the
Dodd-Frank Act, reflects at least two
significant consumer protection
purposes: (1) To establish requirements
that ensure that servicers have a
reasonable basis for undertaking actions
that may harm borrowers; and (2) to
establish servicers’ duties to borrowers
with respect to the servicing of federally
related mortgage loans.20 The Bureau
further stated that, specifically with
respect to mortgage servicing, the
consumer protection purposes of RESPA
include: (1) Responding to borrower
requests and complaints in a timely
manner; (2) maintaining and providing
accurate information; (3) helping
borrowers avoid unwarranted or
unnecessary costs and fees; and (4)
facilitating review for foreclosure
avoidance options.21 The Bureau further
stated that each of the provisions
adopted in the 2013 RESPA Servicing
Rule was intended to achieve some or
all of these purposes.22 The Bureau
intends to focus the assessment on how
well the rule has met these four
purposes, which it believes are
corollaries to certain of the Bureau’s five
objectives set forth in section 1021.
To assess the effectiveness of the 2013
RESPA Servicing Rule, the Bureau plans
to analyze a variety of metrics and data
to the extent feasible. Feasibility will
depend on the availability of data and
the cost to obtain any new data. The
Bureau will seek to gather information
about activities and outcomes including
the ones listed below and seek to
understand how these activities and
outcomes relate to each other:
(1) Servicer activities undertaken to
comply with the 2013 RESPA Servicing
Rule, such as responding to loss
mitigation applications or responding to
borrower notices of error, including the
timing of these actions;
(2) Consumer activities, including (a)
utilization of the rights provided by the
2013 RESPA Servicing Rule, such as
assertion of errors, submission of loss
mitigation applications, submission of
complete applications, and use of
appeals; and (b) consumer actions that
may be prompted or enabled by the
2013 RESPA Servicing Rule, such as
additional payments or other consumer
responses after early intervention by the
servicer or consumer verification of
hazard insurance in response to the 45
day notice sent by the servicer; and
(3) Consumer outcomes that the 2013
RESPA Servicing Rule sought to affect,
including, for example, fees and charges
assessed and paid, incidence and
severity of delinquency, how
delinquency is resolved, and time to
resolution of delinquency. The Bureau
will seek data that can help distinguish
negative outcomes that are plausibly
avoidable by consumers from those that
are not.
The Bureau will seek to understand
how these metrics relate to one another.
In particular, to the extent possible
given available data, the Bureau will
seek to understand how the consumer
outcomes described in category 3 are
affected by the measures of servicer and
consumer activities described in
categories 1 and 2.
The Bureau intends to place emphasis
in the assessment on provisions of the
21 Id.
20 78
FR 10695, 10709 (Feb. 14, 2013).
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2013 RESPA Servicing Rule that have
particular relevance to delinquent
borrowers. These include provisions
governing servicers’ communication
with delinquent borrowers and loss
mitigation procedures, as well as
provisions providing rights that could
be particularly important to consumers
facing payment difficulties, including
error resolution requirements and
requirements applicable to force-placed
insurance. In conducting the assessment
the Bureau plans to focus its resources,
particularly with respect to efforts to
collect new data, on these provisions.
The Bureau anticipates addressing other
provisions of the 2013 RESPA Servicing
Rule to the extent that data are already
available to the Bureau, provided by
commenters in response to this
document, or identified by commenters
and reasonably available.
In conducting the assessment, the
Bureau will seek to compare servicer
and consumer activities and outcomes
to a baseline that would exist if the 2013
RESPA Servicing Rule’s requirements
were not in effect. Doing so is
challenging because the Bureau cannot
observe the activities and outcomes of
an unregulated ‘‘control’’ group, i.e., of
a representative group of servicers that
are exempt from the 2013 RESPA
Servicing Rule.23 In some cases the
Bureau may have access to data from
before the effective date of the 2013
RESPA Servicing Rule that is
informative about the outcomes absent
the 2013 RESPA Servicing Rule. In other
cases there may be institutional factors
that indicate what one would expect to
observe absent the 2013 RESPA
Servicing Rule’s requirements, for
example, where servicer incentives
absent the rule are very clear. Even if
one can observe a clear association
between activities that the rule requires
and consumer outcomes, the Bureau
recognizes that some of those activities
might also be required by consent
orders, State law, or private contracts. In
these cases, the impacts one observes
may reflect these other requirements in
addition to those of the rule. The Bureau
will draw conclusions as supported by
the data, taking into account that factors
23 Exempt entities can serve as a limited type of
control group. While small servicers are exempt
from many provisions of the 2013 RESPA Servicing
Rule, the Bureau understands that many small
servicers follow a business model that differs in
important respects from that of larger servicers,
which may make small servicers an ineffective
control group. The Bureau plans to explore whether
small servicers that fall just below the 5,000-loan
cutoff might serve as an effective control group to
analyze the effectiveness of those provisions of the
2013 RESPA Servicing Rule from which small
servicers are exempt.
E:\FR\FM\11MYP1.SGM
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21956
Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / Proposed Rules
above). In particular, the Bureau invites
the public, including consumers and
their advocates, housing counselors,
mortgage loan servicers and other
industry representatives, industry
analysts, and other interested persons to
submit the following:
(1) Comments on the feasibility and
effectiveness of the assessment plan, the
objectives of the 2013 RESPA Servicing
Rule that the Bureau intends to
emphasize in the assessment, and the
outcomes, metrics, baselines, and
analytical methods for assessing the
effectiveness of the rule as described in
part IV above;
(2) Data and other factual information
that may be useful for executing the
Bureau’s assessment plan, as described
in part IV above;
(3) Recommendations to improve the
assessment plan, as well as data, other
factual information, and sources of data
that would be useful and available to
execute any recommended
improvements to the assessment plan;
(4) Data and other factual information
about the benefits and costs of the rule
for consumers, servicers, and others in
the mortgage industry; and about the
effects of the rule on transparency,
efficiency, access, and innovation in the
mortgage market;
(5) Data and other factual information
about the rule’s effectiveness in meeting
the purposes and objectives of title X of
the Dodd-Frank Act (section 1021),
which are listed in part IV above; and
(6) Recommendations for modifying,
expanding or eliminating the 2013
RESPA Servicing Rule.
V. Request for Comment
To inform the assessment, the Bureau
hereby invites members of the public to
submit information and other comments
relevant to the issues identified below,
as well as any information relevant to
assessing the effectiveness of the 2013
RESPA Servicing Rule in meeting the
purposes and objectives of title X of the
Dodd-Frank Act (section 1021) and the
specific goals of the Bureau (enumerated
pmangrum on DSK3GDR082PROD with PROPOSALS
other than the rule itself may affect
observable outcomes.
The Bureau has data sources,
currently available or in development,
with which to undertake these analyses,
and the Bureau is also planning to
secure additional data. These data
sources include the National Mortgage
Database (NMDB) and the American
Survey of Mortgage Borrowers
(ASMB),24 data from consumer
complaints submitted to the Bureau,
servicing data from a private vendor,
and applicable information obtained
from Bureau supervision and
enforcement activities. The Bureau is
also exploring the availability and
utility of other sources of administrative
data for conducting the assessment.
The Bureau intends to seek input
from housing counselors, legal aid
attorneys, and mortgage servicers as it
analyzes the data described above and
interprets the findings. The Bureau is
also seeking to obtain deidentified loanlevel data from a small number of
servicers. This would potentially allow
the Bureau to correlate mandated
servicer activity (e.g., the early
intervention requirements of the 2013
RESPA Servicing Rule) with consumer
activity (e.g., additional consumer
payments or additional loss mitigation
applications occurring shortly after
early intervention communications). It
would also potentially allow the Bureau
to correlate consumer and servicer
activity with the measures of immediate
consumer outcomes discussed earlier
(fees and charges, delinquency
resolution, time to resolution).
Dated: April 29, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial
Protection.
24 The NMDB and the ASMB are multi-year
projects being jointly undertaken by the Federal
Housing Finance Agency (FHFA) and the Bureau.
See Fed. Hous. Fin. Agency, National Mortgage
Database, https://www.fhfa.gov/PolicyPrograms
Research/Programs/Pages/National-MortgageDatabase.aspx (last visited Mar. 22, 2017); Fed.
Hous. Fin. Agency, American Survey of Mortgage
Borrowers, https://www.fhfa.gov/PolicyPrograms
Research/Programs/Pages/American-Survey-ofMortgage-Borrowers.aspx (last visited Mar. 22,
2017); Bureau of Consumer Fin. Prot., Technical
Reports: National Survey of Mortgage Originations
and National Mortgage Database, https://
www.consumerfinance.gov/data-research/researchreports/technical-reports-national-survey-ofmortgage-borrowers-and-national-mortgagedatabase/(last visited Mar. 22, 2017).
VerDate Sep<11>2014
14:38 May 10, 2017
Jkt 241001
[FR Doc. 2017–09361 Filed 5–10–17; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2017–0419; Directorate
Identifier 2015–SW–077–AD]
RIN 2120–AA64
Airworthiness Directives; Airbus
Helicopters
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
We propose to adopt a new
airworthiness directive (AD) for Airbus
SUMMARY:
PO 00000
Frm 00005
Fmt 4702
Sfmt 4702
Helicopters (Airbus) Model AS332L2
and EC225LP helicopters. This
proposed AD would require inspections
of the main rotor (M/R) blade
attachment pins (attachment pins). This
proposed AD is prompted by a report of
three cracked attachment pins. The
proposed actions are intended to detect
and prevent an unsafe condition on
these products.
DATES: We must receive comments on
this proposed AD by July 10, 2017.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Docket: Go to
https://www.regulations.gov. Follow the
online instructions for sending your
comments electronically.
• Fax: 202–493–2251.
• Mail: Send comments to the U.S.
Department of Transportation, Docket
Operations, M–30, West Building
Ground Floor, Room W12–140, 1200
New Jersey Avenue SE., Washington,
DC 20590–0001.
• Hand Delivery: Deliver to the
‘‘Mail’’ address between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2017–
0419; or in person at the Docket
Operations Office between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays. The AD docket
contains this proposed AD, the
European Aviation Safety Agency
(EASA) AD, the economic evaluation,
any comments received, and other
information. The street address for the
Docket Operations Office (telephone
800–647–5527) is in the ADDRESSES
section. Comments will be available in
the AD docket shortly after receipt.
For service information identified in
this proposed rule, contact Airbus
Helicopters, 2701 N. Forum Drive,
Grand Prairie, TX 75052; telephone
(972) 641–0000 or (800) 232–0323; fax
(972) 641–3775; or at https://
www.airbushelicopters.com/techpub.
You may review the referenced service
information at the FAA, Office of the
Regional Counsel, Southwest Region,
10101 Hillwood Pkwy, Room 6N–321,
Fort Worth, TX 76177.
FOR FURTHER INFORMATION CONTACT:
David Hatfield, Aviation Safety
Engineer, Safety Management Group,
Rotorcraft Directorate, FAA, 10101
Hillwood Pkwy, Fort Worth, TX 76177;
telephone (817) 222–5116; email
david.hatfield@faa.gov.
SUPPLEMENTARY INFORMATION:
E:\FR\FM\11MYP1.SGM
11MYP1
]]>Agencies
[Federal Register Volume 82, Number 90 (Thursday, May 11, 2017)]
[Proposed Rules]
[Pages 21952-21956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09361]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 /
Proposed Rules
[[Page 21952]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1024
[Docket No. CFPB-2017-0012]
Request for Information Regarding 2013 Real Estate Settlement
Procedures Act Servicing Rule Assessment
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice of assessment of 2013 RESPA servicing rule and request
for public comment.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
conducting an assessment of the Mortgage Servicing Rules Under the Real
Estate Settlement Procedures Act (Regulation X), as amended prior to
January 10, 2014, in accordance with section 1022(d) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act. The Bureau is
requesting public comment on its plans for assessing this rule as well
as certain recommendations and information that may be useful in
conducting the planned assessment.
DATES: Comments must be received on or before: July 10, 2017.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2017-
0012, by any of the following methods:
Electronic: https://www.regulations.gov. Follow the
instructions for submitting comments.
Email: FederalRegisterComments@cfpb.gov. Include Docket
No. CFPB-2017-0012 in the subject line of the email.
Mail: Monica Jackson, Office of the Executive Secretary,
Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC
20552.
Hand Delivery/Courier: Monica Jackson, Office of the
Executive Secretary, Consumer Financial Protection Bureau, 1275 First
Street NE., Washington, DC 20002.
Instructions: All submissions should include the document title and
docket number. Because paper mail in the Washington, DC area and at the
Bureau is subject to delay, commenters are encouraged to submit
comments electronically. In general, all comments received will be
posted without change to https://www.regulations.gov. In addition,
comments will be available for public inspection and copying at 1275
First Street NE., Washington, DC 20002 on official business days
between the hours of 10 a.m. and 5 p.m. Eastern Time. You can make an
appointment to inspect the documents by telephoning (202) 435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Sensitive personal information, such as account numbers or Social
Security numbers, should not be included. Comments generally will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Erik Durbin, Senior Economist; Laura
A. Johnson, Senior Counsel; Laurie Maggiano, Servicing and Secondary
Markets Program Manager; Division of Research, Markets, and Regulations
at (202) 435-9243.
SUPPLEMENTARY INFORMATION:
I. Background
Congress established the Bureau in the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank Act).\1\ In the Dodd-
Frank Act, Congress generally consolidated in the Bureau the rulemaking
authority for Federal consumer financial laws previously vested in
certain other Federal agencies. Congress also provided the Bureau with
the authority to, among other things, prescribe rules as may be
necessary or appropriate to enable the Bureau to administer and carry
out the purposes and objectives of the Federal consumer financial laws
and to prevent evasions thereof.\2\ Since 2011, the Bureau has issued a
number of rules adopted under Federal consumer financial law.\3\
---------------------------------------------------------------------------
\1\ Public Law 111-203, 124 Stat. 1376 (2010).
\2\ 12 U.S.C. 5512(b)(1).
\3\ 12 U.S.C. 5512(d).
---------------------------------------------------------------------------
Section 1022(d) of the Dodd-Frank Act requires the Bureau to
conduct an assessment of each significant rule or order adopted by the
Bureau under Federal consumer financial law. The Bureau must publish a
report of the assessment not later than five years after the effective
date of such rule or order. The assessment must address, among other
relevant factors, the rule's effectiveness in meeting the purposes and
objectives of title X of the Dodd-Frank Act and the specific goals
stated by the Bureau. The assessment must reflect available evidence
and any data that the Bureau reasonably may collect. Before publishing
a report of its assessment, the Bureau must invite public comment on
recommendations for modifying, expanding, or eliminating the
significant rule or order.
In January 2013, the Bureau issued the ``Mortgage Servicing Rules
Under the Real Estate Settlement Procedures Act (Regulation X)'' (2013
RESPA Servicing Final Rule).\4\ The Bureau amended the 2013 RESPA
Servicing Final Rule on several occasions before it took effect on
January 10, 2014.\5\ As discussed further below, the Bureau has
determined that the 2013 RESPA Servicing Final Rule and all the
amendments related to it that the Bureau made that took effect on
January 10, 2014 collectively make up a significant rule for purposes
of section 1022(d). The Bureau will conduct an assessment of the 2013
RESPA Servicing Final Rule as so amended, which this document refers to
as the ``2013 RESPA Servicing Rule.'' In this document, the Bureau is
requesting public comment on the issues identified below regarding the
2013 RESPA Servicing Rule.
---------------------------------------------------------------------------
\4\ 78 FR 10695 (Feb. 14, 2013). In January 2013, the Bureau
also issued separate ``Mortgage Servicing Rules Under the Truth in
Lending Act (Regulation Z)'' (2013 TILA Servicing Final Rule). 78 FR
10901 (Feb. 14, 2013). As discussed below, the Bureau has determined
that the 2013 TILA Servicing Final Rule is not a significant rule
(either individually or collectively with any amendments to the 2013
TILA Servicing Final Rule that took effect on January 10, 2014) for
purposes of Dodd-Frank Act section 1022(d). Therefore, the Bureau is
not seeking comment on the 2013 TILA Servicing Final Rule or its
related subsequent amendments in this document.
\5\ See infra note 9.
---------------------------------------------------------------------------
II. Assessment Process
Assessments pursuant to section 1022(d) of the Dodd-Frank Act are
for informational purposes only and are not part of any formal or
informal rulemaking proceedings under the Administrative Procedure Act.
The Bureau plans to consider relevant comments and other information
received as it conducts the assessment
[[Page 21953]]
and prepares an assessment report. The Bureau does not, however, expect
that it will respond in the assessment report to each comment received
pursuant to this document. Furthermore, the Bureau does not anticipate
that the assessment report will include specific proposals by the
Bureau to modify any rules, although the findings made in the
assessment will help to inform the Bureau's thinking as to whether to
consider commencing a rulemaking proceeding in the future.\6\ Upon
completion of the assessment, the Bureau plans to issue an assessment
report no later than January 10, 2019.
---------------------------------------------------------------------------
\6\ The Bureau announces its rulemaking plans in semiannual
updates of its rulemaking agenda, which are posted as part of the
Federal government's Unified Agenda of Regulatory and Deregulatory
Actions. See Off. of Info. and Reg. Affairs, Off. of Mgmt. and
Budget, Current Regulatory Plan and the Unified Agenda of Regulatory
and Deregulatory Actions, https://www.reginfo.gov/public/do/eAgendaMain (last visited Mar. 22, 2017).
---------------------------------------------------------------------------
III. The 2013 RESPA Servicing Rule
Congress adopted the Dodd-Frank Act in response to an unprecedented
cycle of expansion and contraction in the mortgage market that sparked
the most severe U.S. recession since the Great Depression. In the Dodd-
Frank Act, Congress enacted a number of new provisions governing the
origination and servicing of consumer mortgages. Beginning in 2013, the
Bureau issued several final rules to implement these new statutory
provisions. Those rules generally took effect in January 2014.
In January 2013, the Bureau issued the 2013 RESPA Servicing Final
Rule.\7\ The 2013 RESPA Servicing Final Rule contained a number of new
borrower protections, which are summarized below. After finalizing the
rule, consistent with its obligations under section 1022(c) of the
Dodd-Frank Act, the Bureau continued to monitor the mortgage servicing
market and consider whether changes to the 2013 RESPA Servicing Final
Rule were appropriate.\8\ During 2013, the Bureau amended the rule to
address important questions raised by industry, consumer advocacy
groups, and other stakeholders.\9\ As noted above, the effective date
of the 2013 RESPA Servicing Rule, including these amendments, was
January 10, 2014.\10\
---------------------------------------------------------------------------
\7\ 78 FR 10695 (Feb. 14, 2013). In January 2013, the Bureau
also issued the 2013 TILA Servicing Final Rule. 78 FR 10901 (Feb.
14, 2013). The Bureau amended the 2013 TILA Servicing Final Rule on
several occasions before it took effect on January 10, 2014. Infra
note 9. As discussed below, the Bureau has determined that the 2013
TILA Servicing Final Rule is not a significant rule (either
individually or collectively with any amendments to the 2013 TILA
Servicing Final Rule that took effect on January 10, 2014) for
purposes of Dodd-Frank Act section 1022(d). Therefore, the Bureau is
not seeking comment on the 2013 TILA Servicing Final Rule or its
related subsequent amendments in this document.
\8\ Section 1022(c) provides that, to support its rulemaking and
other functions, the Bureau shall monitor for risks to consumers in
the offering or provision of consumer financial products or
services, including developments in the markets for such products or
services.
\9\ In the summer and fall of 2013 the Bureau finalized the (1)
Amendments to the 2013 Mortgage Rules under the Real Estate
Settlement Procedures Act (Regulation X) and the Truth in Lending
Act (Regulation Z) (July 2013 Mortgage Final Rule) and (2)
Amendments to the 2013 Mortgage Rules under the Equal Credit
Opportunity Act (Regulation B), Real Estate Settlement Procedures
Act (Regulation X), and the Truth in Lending Act (Regulation Z)
(September 2013 Mortgage Final Rule). 78 FR 44685 (July 24, 2013);
78 FR 60381 (Oct. 1, 2013). In October 2013, the Bureau clarified
compliance requirements in relation to successors in interest, early
intervention requirements, bankruptcy law, and the Fair Debt
Collection Practices Act (FDCPA), through an Interim Final Rule
(IFR) and a contemporaneous compliance bulletin. Amendments to the
2013 Mortgage Rules under the Real Estate Settlement Procedures Act
(Regulation X) and the Truth in Lending Act (Regulation Z), 78 FR
62993 (Oct. 23, 2013); Bureau of Consumer Fin. Prot., CFPB Bulletin
2013-12, Implementation Guidance for Certain Mortgage Servicing
Rules (Oct. 15, 2013), available at https://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf.
\10\ After the January 10, 2014 effective date of the rules
described above, the Bureau made additional changes to the rule. In
October 2014, the Bureau added an alternative definition of small
servicer that exempted nonprofit entities that meet certain
requirements from certain provisions of the 2013 RESPA Servicing
Final Rule, as well as from other requirements. Amendments to the
2013 TILA Servicing Final Rule, 79 FR 65299 (Nov. 3, 2014). The
effective date of that rule was November 3, 2014. In August 2016,
the Bureau issued numerous additional amendments to provisions of
the 2013 RESPA Servicing Final Rule. Amendments to the 2013 Mortgage
Rules under the Real Estate Settlement Procedures Act (Regulation X)
and the Truth in Lending Act (Regulation Z), 81 FR 72160 (Oct. 19,
2016). The effective dates of these amendments are October 19, 2017
and April 19, 2018, depending on the specific requirements. In this
document, the Bureau is not seeking comment on the amendments to the
mortgage servicing rules that became or will become effective after
the January 10, 2014 effective date of the 2013 RESPA Servicing
Rule.
---------------------------------------------------------------------------
The 2013 RESPA Servicing Rule in part implements section 1463 of
the Dodd-Frank Act, which amended RESPA. Section 1463(a) imposed new
mortgage servicing requirements and prohibitions under RESPA on
servicers of federally related mortgage loans with respect to force-
placed insurance, borrower assertions of error, and borrower requests
for information.\11\ It also provided the Bureau authority to establish
obligations on servicers of federally related mortgage loans
appropriate to carry out the consumer protection purposes of RESPA. The
Bureau also has the authority under RESPA to prescribe such rules and
regulations, to make such interpretations, and to grant such reasonable
exemptions for classes of transactions as may be necessary to achieve
the purposes of RESPA.\12\ Accordingly, the 2013 RESPA Servicing Rule
included not only provisions that implemented the specific Dodd-Frank
Act requirements mentioned above but also provisions regarding
servicing policies and procedures, early intervention with delinquent
borrowers, continuity of contact with delinquent borrowers, and loss
mitigation procedures, as well as certain exemptions, all of which the
Bureau found to be appropriate to carry out or necessary to achieve the
purposes of RESPA and title X and prevent evasion of those laws.
---------------------------------------------------------------------------
\11\ For example, the 2013 RESPA Servicing Rule's force-placed
insurance provisions implement sections 6(k)(1)(A), 6(k)(2), 6(l)
and 6(m) of RESPA, which were added by section 1463 of the Dodd-
Frank Act. The 2013 RESPA Servicing Rule's error resolution and
information request provisions implement section 6(k)(1)(B) through
(D) of RESPA, which was added by section 1463 of the Dodd-Frank Act.
The Dodd-Frank Act also imposed certain new requirements under TILA
relating to mortgage servicing, and the Bureau issued rules in
TILA's implementing Regulation Z. As noted above and below, the
Bureau is not seeking comment on the 2013 TILA Servicing Final Rule
or its related subsequent amendments in this document.
\12\ 12 U.S.C. 2617(a).
---------------------------------------------------------------------------
A. Major Provisions of the Servicing Rule
The 2013 RESPA Servicing Rule addressed six major topics, which are
summarized below. Many of these requirements do not apply to small
servicers, generally defined as servicers that service 5,000 mortgage
loans or fewer and only service mortgage loans the servicer or an
affiliate owns or originated.\13\ Small servicers are exempt from:
Certain requirements relating to obtaining force-placed insurance; the
provisions relating to general servicing policies, procedures, and
requirements; and certain requirements and restrictions relating to
communicating with borrowers about, and evaluation of, loss mitigation
applications.
---------------------------------------------------------------------------
\13\ See 12 CFR 1024.30(b)(1); 12 CFR 1026.41(e)(4).
---------------------------------------------------------------------------
1. Force-placed insurance. The rule prohibits servicers from
charging a borrower for force-placed insurance coverage unless the
servicer has a reasonable basis to believe the borrower has failed to
maintain hazard insurance required by the loan agreement. Where the
borrower has an escrow account for the payment of hazard insurance
premiums, the servicer is prohibited from obtaining force-placed
insurance where the servicer can continue the borrower's homeowner
insurance, even if the servicer needs to advance funds to the
borrower's escrow account to do so. The rule also requires servicers to
send
[[Page 21954]]
two notices before charging the borrower for force-placed insurance
coverage and provides other requirements regarding force-placed
insurance.
2. Error resolution and information requests. The rule requires
servicers to comply with certain error resolution procedures for
written notices of error relating to the servicing of a mortgage loan.
Servicers generally are required to acknowledge the notice of error
within five days and to investigate and respond in writing within 30
days, either correcting the error or notifying the borrower that no
error occurred. Similar procedures and timeframes apply to servicer
acknowledgment of and response to borrower written requests for
information.
3. General servicing policies, procedures, and requirements. The
rule requires servicers to establish policies and procedures reasonably
designed to achieve objectives specified in the rule.
4. Early intervention with delinquent borrowers. The rule generally
requires servicers to establish or make good faith efforts to establish
live contact with borrowers by the 36th day of their delinquency (for
each billing cycle for which a payment sufficient to cover principal,
interest, and, if applicable, escrow is due and unpaid) and to promptly
inform such borrowers, where appropriate, that loss mitigation options
may be available. In addition, servicers must generally provide
borrowers a written notice with information about loss mitigation
options by the 45th day of their delinquency.
5. Continuity of contact with delinquent borrowers. The rule
requires servicers to maintain reasonable policies and procedures with
respect to providing delinquent borrowers with access to personnel to
assist them with loss mitigation options where applicable.
6. Loss mitigation procedures. The rule requires servicers to
follow specified loss mitigation procedures for a mortgage loan secured
by a borrower's principal residence. Servicers generally must provide a
written notice acknowledging receipt of a borrower's loss mitigation
application within five days and exercise reasonable diligence in
obtaining documents and information to complete the application. For a
complete loss mitigation application received more than 37 days before
a foreclosure sale, the rule requires the servicer to evaluate the
borrower, within 30 days, for all loss mitigation options available to
the borrower in accordance with the investor's eligibility rules. The
rule also prohibits a servicer from making the first notice or filing
required by applicable law for any judicial or nonjudicial foreclosure
process until a mortgage loan is more than 120 days delinquent and
places certain restrictions on ``dual tracking,'' where a servicer is
simultaneously processing a consumer's loss mitigation application at
the same time that it advances the foreclosure process.
B. Significant Rule Determination
The Bureau has determined that the 2013 RESPA Servicing Rule is a
significant rule for purposes of Dodd-Frank Act section 1022(d). The
Bureau makes this determination partly on the basis of the estimated
aggregate annual cost to industry of complying with the rule.\14\ The
rule mandated a large number of changes in the features of mortgage
servicing, including new disclosures for force-placed insurance, an
expanded error resolution regime, and new servicing procedures and
requirements that apply to all servicing of delinquent loans, including
mandated timelines and procedural rights in loss mitigation. These
changes in turn required multiple changes in business operations,
including adjustments in technology, training and compliance. The
Bureau noted in the preamble to the 2013 RESPA Servicing Final Rule
that these changes would require servicers to make changes to systems
and procedures and that the new requirements could require servicers to
increase staffing time devoted to certain activities and to hire more
staff.\15\ Taking all of these factors into consideration, the Bureau
has concluded that the 2013 RESPA Servicing Rule is ``significant'' for
purposes of Dodd-Frank Act section 1022(d).
---------------------------------------------------------------------------
\14\ In the Paperwork Reduction Act (PRA) Analysis published
with the 2013 RESPA Servicing Final Rule, the Bureau estimated an
additional 1,100,000 in ongoing burden hours (as well as an
additional 29,000 in one-time burden hours) from the 2013 RESPA
Servicing Final Rule. 78 FR 10695, 10873 (Feb. 14, 2013). In the
Supporting Statement submitted to OMB, the Bureau valued the ongoing
burden hours at $19.00 per hour. Thus, there was approximately $20.9
million in additional ongoing PRA burden from the 2013 RESPA
Servicing Final Rule. In addition, the Bureau estimated that the
2013 RESPA Servicing Final Rule would increase the cost of servicing
distressed loans subject to the new requirements in ways not
included in the PRA burden, and estimated that these additional
costs would total at least $90 million. See U.S. Gov't
Accountability Off., GAO-14-67, Dodd-Frank Regulations: Agencies
Conducted Regulatory Analyses and Coordinated but Could Benefit from
Additional Guidance on Major Rules, at 18-19 (Dec. 11, 2013),
available at https://www.gao.gov/products/GAO-14-67.
\15\ See 78 FR 10695, 10847-60 (Feb. 14, 2013).
---------------------------------------------------------------------------
The 2013 TILA Servicing Final Rule became effective at the same
time as the 2013 RESPA Servicing Rule. The Bureau has determined that
the 2013 TILA Servicing Final Rule is not a significant rule (either
individually or collectively with any amendments to the 2013 TILA
Servicing Final Rule that took effect on January 10, 2014) for purposes
of Dodd-Frank Act section 1022(d). The rule implemented the periodic
statement requirement created by Dodd-Frank Act section 1420, and
exempted small servicers from this requirement. The rule also required
a new initial adjustable-rate mortgage notice and revised certain
existing disclosures and other servicing provisions under the Truth in
Lending Act. The estimated cost to servicers of complying with the rule
is small, as set forth in the Bureau's analysis of benefits and costs
that accompanied the rule.\16\ In this respect, the 2013 TILA Servicing
Final Rule generally modified important disclosures that consumers were
already receiving, meaning that additional ongoing costs and
operational changes to distribute the disclosures are small.\17\ The
rule did require one-time changes to provide additional important
information in the disclosures; \18\ however, Bureau outreach generally
found that vendors would make these changes so the one-time costs would
be spread over many entities.\19\ The rule's new disclosure
requirements were intended to help certain groups of consumers make
better decisions and were not expected to affect competition,
innovation, or pricing in the mortgage market. These factors lead the
Bureau to
[[Page 21955]]
conclude that the 2013 TILA Servicing Final Rule is not ``significant''
for purposes of section 1022(d).
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\16\ In the PRA Analysis published with the 2013 TILA Servicing
Final Rule, the Bureau estimated an additional 56,000 in ongoing
burden hours (as well as an additional 5,000 in one-time burden
hours) from the 2013 TILA Servicing Final Rule as well as ongoing
vendor costs of $5.7 million. 78 FR 10901, 11004 (Feb. 14, 2013). In
the Supporting Statement submitted to OMB, the Bureau valued the
ongoing burden hours at $19.00 per hour. Thus, there was
approximately $6.7 million in additional ongoing PRA burden from the
2013 TILA Servicing Final Rule. The Bureau's section 1022 (b)(2)
analysis considered that covered persons might receive less revenue
through fees and charges as consumers responded to superior
disclosures, but did not identify these costs as substantial. 78 FR
10901, 10989.
\17\ Consumers were already receiving the ARM adjustment notice,
and the Bureau estimated that the new periodic statement, where
required, would for the most part replace billing statements that
consumers were already receiving. Regarding the new initial interest
rate adjustment disclosure, the Bureau estimated that annual
production and distribution costs would be $140,000 (50 cents per
disclosure). 78 FR 10901, 10988 (Feb. 14, 2013).
\18\ The Bureau noted that the additional information provided
by the revised ARM adjustment notice and new periodic statement
might require servicers (more specifically, their vendors) to access
databases that were not regularly accessed by systems that produced
the existing disclosures. 78 FR 10901, 10984-85, 10992 (Feb. 14,
2013).
\19\ 78 FR 10901, 10985 (Feb. 14, 2013).
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IV. The Assessment Plan
Because the Bureau has determined that the 2013 RESPA Servicing
Rule is a significant rule for purposes of Dodd-Frank Act section
1022(d), section 1022(d) requires the Bureau to assess the rule's
effectiveness in meeting the purposes and objectives of title X of the
Dodd-Frank Act and the specific goals stated by the Bureau. Section
1021 of the Dodd-Frank Act states that the Bureau's purpose is to
implement and, where applicable, enforce Federal consumer financial law
consistently for the purpose of ensuring that all consumers have access
to markets for consumer financial products and services and that
markets for consumer financial products and services are fair,
transparent, and competitive. Section 1021 also sets forth the Bureau's
objectives, which are to ensure that, with respect to consumer
financial products and services:
Consumers are provided with timely and understandable
information to make responsible decisions about financial transactions;
Consumers are protected from unfair, deceptive, or abusive
acts and practices and from discrimination;
Outdated, unnecessary, or unduly burdensome regulations
are regularly identified and addressed in order to reduce unwarranted
regulatory burdens;
Federal consumer financial law is enforced consistently,
without regard to the status of a person as a depository institution,
in order to promote fair competition; and
Markets for consumer financial products and services
operate transparently and efficiently to facilitate access and
innovation.
In the 2013 RESPA Servicing Rule, the Bureau stated that,
considered as a whole, RESPA, as amended by the Dodd-Frank Act,
reflects at least two significant consumer protection purposes: (1) To
establish requirements that ensure that servicers have a reasonable
basis for undertaking actions that may harm borrowers; and (2) to
establish servicers' duties to borrowers with respect to the servicing
of federally related mortgage loans.\20\ The Bureau further stated
that, specifically with respect to mortgage servicing, the consumer
protection purposes of RESPA include: (1) Responding to borrower
requests and complaints in a timely manner; (2) maintaining and
providing accurate information; (3) helping borrowers avoid unwarranted
or unnecessary costs and fees; and (4) facilitating review for
foreclosure avoidance options.\21\ The Bureau further stated that each
of the provisions adopted in the 2013 RESPA Servicing Rule was intended
to achieve some or all of these purposes.\22\ The Bureau intends to
focus the assessment on how well the rule has met these four purposes,
which it believes are corollaries to certain of the Bureau's five
objectives set forth in section 1021.
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\20\ 78 FR 10695, 10709 (Feb. 14, 2013).
\21\ Id.
\22\ Id.
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To assess the effectiveness of the 2013 RESPA Servicing Rule, the
Bureau plans to analyze a variety of metrics and data to the extent
feasible. Feasibility will depend on the availability of data and the
cost to obtain any new data. The Bureau will seek to gather information
about activities and outcomes including the ones listed below and seek
to understand how these activities and outcomes relate to each other:
(1) Servicer activities undertaken to comply with the 2013 RESPA
Servicing Rule, such as responding to loss mitigation applications or
responding to borrower notices of error, including the timing of these
actions;
(2) Consumer activities, including (a) utilization of the rights
provided by the 2013 RESPA Servicing Rule, such as assertion of errors,
submission of loss mitigation applications, submission of complete
applications, and use of appeals; and (b) consumer actions that may be
prompted or enabled by the 2013 RESPA Servicing Rule, such as
additional payments or other consumer responses after early
intervention by the servicer or consumer verification of hazard
insurance in response to the 45 day notice sent by the servicer; and
(3) Consumer outcomes that the 2013 RESPA Servicing Rule sought to
affect, including, for example, fees and charges assessed and paid,
incidence and severity of delinquency, how delinquency is resolved, and
time to resolution of delinquency. The Bureau will seek data that can
help distinguish negative outcomes that are plausibly avoidable by
consumers from those that are not.
The Bureau will seek to understand how these metrics relate to one
another. In particular, to the extent possible given available data,
the Bureau will seek to understand how the consumer outcomes described
in category 3 are affected by the measures of servicer and consumer
activities described in categories 1 and 2.
The Bureau intends to place emphasis in the assessment on
provisions of the 2013 RESPA Servicing Rule that have particular
relevance to delinquent borrowers. These include provisions governing
servicers' communication with delinquent borrowers and loss mitigation
procedures, as well as provisions providing rights that could be
particularly important to consumers facing payment difficulties,
including error resolution requirements and requirements applicable to
force-placed insurance. In conducting the assessment the Bureau plans
to focus its resources, particularly with respect to efforts to collect
new data, on these provisions. The Bureau anticipates addressing other
provisions of the 2013 RESPA Servicing Rule to the extent that data are
already available to the Bureau, provided by commenters in response to
this document, or identified by commenters and reasonably available.
In conducting the assessment, the Bureau will seek to compare
servicer and consumer activities and outcomes to a baseline that would
exist if the 2013 RESPA Servicing Rule's requirements were not in
effect. Doing so is challenging because the Bureau cannot observe the
activities and outcomes of an unregulated ``control'' group, i.e., of a
representative group of servicers that are exempt from the 2013 RESPA
Servicing Rule.\23\ In some cases the Bureau may have access to data
from before the effective date of the 2013 RESPA Servicing Rule that is
informative about the outcomes absent the 2013 RESPA Servicing Rule. In
other cases there may be institutional factors that indicate what one
would expect to observe absent the 2013 RESPA Servicing Rule's
requirements, for example, where servicer incentives absent the rule
are very clear. Even if one can observe a clear association between
activities that the rule requires and consumer outcomes, the Bureau
recognizes that some of those activities might also be required by
consent orders, State law, or private contracts. In these cases, the
impacts one observes may reflect these other requirements in addition
to those of the rule. The Bureau will draw conclusions as supported by
the data, taking into account that factors
[[Page 21956]]
other than the rule itself may affect observable outcomes.
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\23\ Exempt entities can serve as a limited type of control
group. While small servicers are exempt from many provisions of the
2013 RESPA Servicing Rule, the Bureau understands that many small
servicers follow a business model that differs in important respects
from that of larger servicers, which may make small servicers an
ineffective control group. The Bureau plans to explore whether small
servicers that fall just below the 5,000-loan cutoff might serve as
an effective control group to analyze the effectiveness of those
provisions of the 2013 RESPA Servicing Rule from which small
servicers are exempt.
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The Bureau has data sources, currently available or in development,
with which to undertake these analyses, and the Bureau is also planning
to secure additional data. These data sources include the National
Mortgage Database (NMDB) and the American Survey of Mortgage Borrowers
(ASMB),\24\ data from consumer complaints submitted to the Bureau,
servicing data from a private vendor, and applicable information
obtained from Bureau supervision and enforcement activities. The Bureau
is also exploring the availability and utility of other sources of
administrative data for conducting the assessment.
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\24\ The NMDB and the ASMB are multi-year projects being jointly
undertaken by the Federal Housing Finance Agency (FHFA) and the
Bureau. See Fed. Hous. Fin. Agency, National Mortgage Database,
https://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/National-Mortgage-Database.aspx (last visited Mar. 22, 2017); Fed. Hous. Fin.
Agency, American Survey of Mortgage Borrowers, https://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/American-Survey-of-Mortgage-Borrowers.aspx (last visited Mar. 22, 2017); Bureau of Consumer Fin.
Prot., Technical Reports: National Survey of Mortgage Originations
and National Mortgage Database, https://www.consumerfinance.gov/data-research/research-reports/technical-reports-national-survey-of-mortgage-borrowers-and-national-mortgage-database/(last visited Mar.
22, 2017).
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The Bureau intends to seek input from housing counselors, legal aid
attorneys, and mortgage servicers as it analyzes the data described
above and interprets the findings. The Bureau is also seeking to obtain
deidentified loan-level data from a small number of servicers. This
would potentially allow the Bureau to correlate mandated servicer
activity (e.g., the early intervention requirements of the 2013 RESPA
Servicing Rule) with consumer activity (e.g., additional consumer
payments or additional loss mitigation applications occurring shortly
after early intervention communications). It would also potentially
allow the Bureau to correlate consumer and servicer activity with the
measures of immediate consumer outcomes discussed earlier (fees and
charges, delinquency resolution, time to resolution).
V. Request for Comment
To inform the assessment, the Bureau hereby invites members of the
public to submit information and other comments relevant to the issues
identified below, as well as any information relevant to assessing the
effectiveness of the 2013 RESPA Servicing Rule in meeting the purposes
and objectives of title X of the Dodd-Frank Act (section 1021) and the
specific goals of the Bureau (enumerated above). In particular, the
Bureau invites the public, including consumers and their advocates,
housing counselors, mortgage loan servicers and other industry
representatives, industry analysts, and other interested persons to
submit the following:
(1) Comments on the feasibility and effectiveness of the assessment
plan, the objectives of the 2013 RESPA Servicing Rule that the Bureau
intends to emphasize in the assessment, and the outcomes, metrics,
baselines, and analytical methods for assessing the effectiveness of
the rule as described in part IV above;
(2) Data and other factual information that may be useful for
executing the Bureau's assessment plan, as described in part IV above;
(3) Recommendations to improve the assessment plan, as well as
data, other factual information, and sources of data that would be
useful and available to execute any recommended improvements to the
assessment plan;
(4) Data and other factual information about the benefits and costs
of the rule for consumers, servicers, and others in the mortgage
industry; and about the effects of the rule on transparency,
efficiency, access, and innovation in the mortgage market;
(5) Data and other factual information about the rule's
effectiveness in meeting the purposes and objectives of title X of the
Dodd-Frank Act (section 1021), which are listed in part IV above; and
(6) Recommendations for modifying, expanding or eliminating the
2013 RESPA Servicing Rule.
Dated: April 29, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-09361 Filed 5-10-17; 8:45 am]
BILLING CODE 4810-AM-P
