WASHINGTON (UPDATE 8/10/11, 11:32 a.m. ET)--Credit unions and other mortgage servicers would have to provide clearer monthly statements and would have to take additional steps before foreclosing on a property, under proposed regulations unveiled today by the Consumer Financial Protection Bureau (CFPB).
Under the rules, which are open for comment through Oct. 9, servicers couldn't foreclose on a home until a homeowner is given the chance to apply for alternative ways to keep their homes.
In addition, the servicers must provide statements which break down payments by principal, interest, fees, and escrow; the amount of and due date of the next payment; recent transaction activity; and warnings about fees. Also, servicers would have to provide earlier warnings before any changes to adjustable rate mortgages.
"These proposed rules would offer consumers basic protections and put the 'service' back into mortgage servicing. The goal is to prevent mortgage servicers from giving their customers unwelcome surprises and runarounds,'' CFPB Director Richard Cordray said in a statement.
Credit Union National Association officials have met regularly with agency officials to make the regulations less onerous and will continue to do so until the final regulations are issued in January.
Read the Monday issue of CUNA's News Now for more.