Consumer watchdog to mortgage servicers: Do your jobs

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The folks who collect your monthly mortgage payments aren't doing their jobs.

So says a federal consumer watchdog agency, which plans to force servicers to do the right thing, like crediting you for the payments you send in, listening when you tell them they made a mistake and being clear about how your loan works when payment changes are ahead.

Amazing that someone has to tell servicers to do these basic things.

"The mortgage servicing rules we are considering reflect two basic, common-sense principles -- no surprises and no runarounds," says Richard Cordray, director of the Consumer Financial Protection Bureau, a regulator created in the wake of the 2008 financial crisis. "For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress."

The CFPB’s plan is to make all servicers follow the same rules about customer service, your escrow account, payment changes, homeowners insurance and helping you when you run into financial difficulties.
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Here’s what the rules say servicers would have to give you:

Don’t expect any of these changes to happen today.

First, the CFPB has to propose a rule outlining the changes (this summer), then it takes comments (including yours if you like) and then it will publish a final rule (January 2013). After that, the industry gets a transition period to get ready to follow the rules.

Until then, here’s hoping your servicer is already doing its job. If not, a new servicer is just a refinance away.

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