In guidance issued jointly by the FRB, the CFPB, the FDIC, the NCUA and the OCC, mortgage servicers are advised to avoid practices that may pose risks to military servicemembers. This guidance focuses on regulations pertaining to servicemembers who have received permanent change of station orders, commonly known as “PCS Orders.” The guidance signals that these agencies will continue to pay particular attention to the conduct of mortgage servicers when dealing with servicemembers.
The agencies expressed concern about servicers’ alleged failure to provide servicemembers with PCS Orders with “clear and readily understandable information” regarding options for assistance with their mortgage loans. The guidance identifies a number of unlawful practices, including: asking servicemembers with PCS Orders to waive their rights under the Servicemembers Civil Relief Act, or any other law, as a condition to offering information regarding options for homeowner’s assistance, or advising servicemembers to intentionally skip payments on their loans to create the appearance of financial difficulties. The guidance notes that servicers found to have engaged in such practices, or otherwise failed to have complied with applicable regulations, will be subject to supervisory and enforcement actions to correct the unlawful practices. Both Director Richard Cordray and the Assistant Director for the Office of Servicemembers Affairs, Holly Petraeus issued public statements. Click here for the CFPB press release.
Consumer Financial Services
Consumer Financial Services Litigation
© 2014 Goodwin Procter LLP. All rights reserved. This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP, Goodwin Procter (UK) LLP or their attorneys. Prior results do not guarantee similar outcome.
Goodwin Procter LLP is a limited liability partnership which operates in the United States and has a principal law office located at 53 State Street, Boston, MA 02109. Goodwin Procter (UK) LLP is a separate limited liability partnership registered in England and Wales with registered number OC362294. Its registered office is at Tower 42, 25 Old Broad Street, London EC2N 1HQ. A list of the names of the members of Goodwin Procter (UK) LLP is available for inspection at the registered office. Goodwin Procter (UK) LLP is authorized and regulated by the Solicitors Regulation Authority.