The CFPB now wants comments on a prototype monthly mortgage statement. The form already has been through one round of testing, and two more rounds are planned.
Despite industry opposition, the Dodd-Frank Act included a requirement for creditors, assignees or servicers of mortgage loans to provide periodic statements to borrowers containing specified information and directed the CFPB to develop a model form for the statements that takes into account the possibility of either written or electronic delivery. The industry did obtain an exception for fixed-rate mortgage loans if the borrower is provided with a coupon book that contains substantially the same information required to be in the statements.
The CFPB prototype is a one-page document, with all of the account-specific information appearing only on the front side. It uses shading, something the industry regularly opposes because of the legibility concerns that arise when a form with shading is reproduced. The form includes an “Important Message” section that sets forth the required counseling disclosure and refers borrowers to the reverse side for contact information for three local counseling programs. The CFPB advises that there will be flexibility to tailor the model form for the needs of the provider and its customers, and since the “Important Message” section also includes a customer relations statement, the CFPB apparently considers such a statement to be an item that can be added to the form.
In addition to the counseling contact information, the form contemplates that the sender’s mailing address will appear on the reverse side. However, the CFPB doesn’t indicate what other information must be, or could be, including on the reverse side.
The prototype uses as an example an adjustable-rate mortgage loan with its next payment due on April 1, 2012. Although the prototype is dated March 20, 2012, which is 12 days before the April 1 due date, the CFPB has not expressly indicated whether it intends to propose a minimum number of days before the payment due date by which a statement must be delivered.
The CFPB says that once the prototype is ready, it plans to issue a proposed rule and model form this summer. The proposed rule will address the required contents of the form, and presumably delivery requirements. We will provide updates on this process, including our thoughts on further prototypes.