U.S. watchdog cracks down on mortgage servicers

Source: Koh Qing, Katanga Johnson, Chris Prentice & Koh Gui Qing, Reuters

The U.S. consumer watchdog is scrutinizing mortgage servicers’ compliance with pandemic relief programs amid concerns struggling homeowners are not getting the help they need to avoid foreclosures, or are being discriminated against, said a dozen people with knowledge of the regulatory effort.

The Consumer Financial Protection Bureau (CFPB) crackdown by its policy, supervision and enforcement divisions could result in stiff penalties for those mortgage servicers found to have hurt borrowers, the regulatory officials, lawyers and industry executives said. In recent weeks, the agency has sent data requests to mortgage servicers, usually a company or a bank that processes mortgage repayments. It is seeking data on how they are handling mortgage holiday or "forbearance" programs and whether the temporary debt relief is likely to get borrowers back on their feet.

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