By Christopher Jackson, Communications Coordinator, Elder Law of Michigan, and CERA Project Administrator
Recently, the CFPB (Consumer Financial Protection Bureau) has proposed changes to its mortgage servicing rules that provide protections to struggling homeowners. The rules in their current form apply to a mortgage borrower, but do not apply to their successors in interests, when the mortgage borrower dies. A successor in interest is an individual who takes an interest in property following the death of the owner or mortgage borrower. Mortgage servicers are supposed to identify and communicate with family members upon the mortgage borrowers’ death, but this is not always the reality. Many successors in interest, whether they be a spouse, children, or other family members, have reported to the CFPB that they have difficulty getting the mortgage servicers to communicate with them. The CFPB states that the goal of the proposed rule changes are to provide successors in interests with the same protections as those afforded to the mortgage borrower.
As part of the proposal process, the CFPB has opened up its proposal for comments from the public. The proposed rule changes can be found here. The CFPB has expressed interest in hearing feedback regarding the following things:
- Should protections apply to successors in interest before the servicer has confirmed the successor in interest’s identity and ownership interest in the property?
- The proposed rule would require the servicer to respond to any written communication by a proposed successor in interest that may indicate that he or she is a successor in interest, as long as it also provided (1) the name of the prior borrower, and (2) information that enabled the servicer to identify that borrower’s mortgage loan account.
However, the Bureau is also seeking comment on whether the rule should be less broad. Should a servicer be required to respond only to a written communication that specifically requests information regarding the servicer’s requirements for confirming the successor’s identity and ownership interest in the property? The Bureau is seeking comment on whether the broader approach is necessary to protect successors in interest, who may not be aware that they need to confirm their identity and ownership interest in the property.
- Should servicers be required to respond to information requests from potential successors in interest at any of the servicer’s locations (as opposed to a specified single address)?
- Should servicers be required to notify a potential successor in interest of their confirmed status in writing?
- What other changes would provide necessary protection to successors in interest?
The CFPB has set a deadline of March 16, 2015 for public comments regarding the proposed rule changes. Comments regarding the proposed changes can be submitted here.