Comments to CFPB on the 2013 RESPA Servicing Rule

Monica Jackson
Office of the Executive Secretary
Bureau of Consumer Financial Protection
1275 First Street, N.E.
Washington, DC 20002

Dear Ms. Jackson:

The American Bankers Association (“ABA”) appreciates the opportunity to comment on the Bureau of Consumer Financial Protection’s (“CFPB”) plan to assess the 2013 RESPA Servicing Rule. The CFPB is conducting its assessment of the RESPA Servicing Rule pursuant to Section 1022(d) of the Dodd-Frank Act. Section 1022(d) requires that the CFPB evaluate each significant rule it issues and publish a report of that assessment within five years of the rule’s effective date. In the case of the Servicing Rules, the CFPB must issue its report by January 10, 2019.

ABA offers the following recommendations regarding the CFPB’s assessment:

• Scope. The CFPB should incorporate all of the Servicing Rules into its review, including the rules that implement the Truth and Lending Act (the “TILA Rules”) and the amendments that the CFPB adopted to the Servicing Rules in 2016 (the “2016 Amendments”).
• Impacts to Consumers. When evaluating potential borrower benefits, the CFPB should study whether the Rules improved the response and engagement of delinquent borrowers. The CFPB should also evaluate the effectiveness of model disclosures and impacts to a borrower’s ability to pursue a preferred loss mitigation option. In addition, the CFPB should take the National Mortgage Settlement into consideration when weighing the extent to which the Servicing Rules achieved their stated objectives.
• Market Impacts. ABA also recommends that the CFPB analyze how the Servicing Rules affected the servicing market, including changes in business models of market participants, the increased cost to service mortgage loans, and changes in valuations and sales of mortgage servicing rights (“MSRs”).
• Lessons Learned and Opportunities for Improvement. Finally, ABA recommends that the CFPB utilize the assessment as an opportunity to evaluate and document the various lessons learned from the adoption and rollout of the Servicing Rules. We also identify several ways that the Servicing Rules can be improved.

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