CFPB ORDERS SPECIALIZED LOANS SERVICING TO PAY $1.5 MILLION FOR FORECLOSURE ISSUES The Consumer Financial Protection Bureau (CFPB) is a 21st-century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. According to CFPB’s servicing rules valid from 2014, servicers are prohibited from starting the foreclosure process after submission of the loss mitigation application by a distressed borrower. INVESTIGATIONS INTO THE SPECIALIZED LOANS SERVICING According to CFPB, the Specialized Loans Servicing (SLS), a mortgage-loan servicer from Colorado, did not always stick to these rules. After thorough investigation, the Bureau discovered that since January 2014, SLS had violated the Real Estate Settlement Procedures Act (RESPA) and Regulation X by taking prohibited foreclosure actions against mortgage borrowers who were entitled
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to protection from foreclosure. The investigations also found out that SLS had several failed to send timely evaluation notices to entitled borrowers.
“Since January 10, 2014, Respondent made First Filings, moved for foreclosure judgment or order of sale, and conducted foreclosure sales in certain instances where the borrower was entitled to protection
from these actions,” the Bureau stated in its consent order. “In some cases, SLS’s violations of Regulation X shortcircuited the protections against foreclosure for consumers whose homes were ultimately foreclosed upon.” On May 11, CFPB settled the allegations with SLS through a consent order. Following the consent order, SLS is
THE POWER IS NOW MAGAZINE | JULY 2020
