The CFPB today issued its final rules implementing provisions of the Dodd-Frank Act that relate to mortgage servicing, which will take effect on January 10, 2014. 

In conjunction with issuing the final rules, a summary of the rules, and a fact sheet, the CFPB held a public hearing in Atlanta, where consumer and industry representatives were invited to express their views. Consumer representatives believe the rules are a good first step and advised that additional changes are needed, such as requiring borrowers to be entitled to an affordable loan modification and requiring servicers to communicate with borrowers in their native language.

Industry representatives welcomed the uniformity in practices that the rules will promote, but noted that further analysis of the rules is needed. These representatives also said the industry likely would ask for reconsideration of the one-year implementation time frame for certain requirements.

In addressing the final rules, the CFPB noted that borrowers will have the right to file lawsuits claiming servicers failed to comply with the loss mitigation requirements of the rules. Significantly, these requirements include a prohibition on making the first notice or filing required for a judicial or non-judicial foreclosure until the loan is delinquent at least 120 days. Borrowers will not be able to file lawsuits based on the requirements for servicers to provide for continuity of contact with delinquent borrowers or to establish policies and procedures to meet the objectives of the final rules.

The CFPB also indicated that it will have more to say on mortgage servicing transfers in the next month or two.

Ballard Spahr’s Mortgage Banking Group is examining the rules (combined, they encompass 1,179 pages) and will issue an analysis of the rules and their implications for the mortgage industry. In addition, we will cover these rules, among others, in our January 30, 2013, webinar, “Top 10 Takeaways from the Ability-to-Repay/QM, Servicing, and Loan Originator Compensation Rules.”

We also encourage you to follow our Mortgage Banking Update, as well as future webinars and legal alerts, for additional details and analysis on these and other final CPFB rules.

The Mortgage Banking Group combines broad regulatory experience assisting clients in both the residential and commercial mortgage industries with formidable skill in litigation and depth in enforcement actions and transactions. It is part of Ballard Spahr’s Consumer Financial Services Group, which produces the CFPB Monitor, a blog that focuses exclusively on important Consumer Financial Protection Bureau developments. To subscribe, use the link provided to the right.

For more information on the mortgage servicing rules, contact Richard J. Andreano, Jr., at 202.661.2271 or, or John D. Socknat at 202.661.2253 or

Copyright © 2013 by Ballard Spahr LLP.
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