In his remarks at the Mortgage Bankers Association’s annual meeting in Boston on October 25, Director Cordray signaled that mortgage servicing will continue to be a focus of CFPB supervisory and enforcement activity, with the CFPB taking a rigorous approach to compliance.  

While noting that the CFPB has seen “some progress” in compliance with CFPB mortgage servicing rules,” most notably efforts by certain servicers to adequately staff up effective compliance management programs,”  Director Cordray stated that “many troubling issues persist.”  In particular, he pointed to “[o]utdated and deficient servicing technology [that]continues to put many consumers at risk,” and said “[t]his problem is made worse by a lack of training to use their technology effectively.”  He also observed that “[t]hese shortcomings can become chronic when servicers do not implement proper system testing and auditing processes.”   Director Cordray warned servicers that “[t]o spur” improved compliance, the CFPB “will, in appropriate circumstances, be insisting on specific and credible plans from servicers describing how their information technology systems will be upgraded and improved to resolve these issues effectively.”

Director Cordray gave a more positive message when discussing lender compliance with the final TILA-RESPA Integrated Disclosure rule.  He commented that he was “happy to report that our initial examinations seem to indicate, just as we expected, that lenders did in fact make good faith efforts to comply with the rules and generally we are finding that consumers are receiving timely and accurate Loan Estimates and Closing Disclosures.”

We have previously commented that, in our view, the CFPB is likely to seeking a rehearing of the D.C. Circuit’s decision in PHH Corporation v. CFPB by the November 25th deadline.  In his remarks, Director Cordray appeared to confirm that a CFPB petition for rehearing is likely.  He stated that “[t]he case is not final at this point” and that the CFPB “has made clear that it respectfully disagrees with the panel’s decision and is considering its options for seeking further review.”

Director Cordray also emphasized the need for companies to give “careful attention” to customer complaints.  He reminded companies of the CFPB’s use of complaints, stating that “[b]y closely analyzing complaint patterns, we can identify spikes in specific complaint types, emerging trends, issues with new and evolving products, and patterns across geographic areas, companies and consumer demographics.”  He told companies that they should “be doing the same thing, not only with our complaints and the feedback you receive directly from your own customers, but also by reviewing complaints made about others in the same markets.”