In guidance issued jointly by the FRB, the CFPB, the FDIC, the NCUA and the OCC, mortgage servicers are advised to avoid practices that may pose risks to military servicemembers. This guidance focuses on regulations pertaining to servicemembers who have received permanent change of station orders, commonly known as “PCS Orders.” The guidance signals that these agencies will continue to pay particular attention to the conduct of mortgage servicers when dealing with servicemembers.
The agencies expressed concern about servicers’ alleged failure to provide servicemembers with PCS Orders with “clear and readily understandable information” regarding options for assistance with their mortgage loans. The guidance identifies a number of unlawful practices, including: asking servicemembers with PCS Orders to waive their rights under the Servicemembers Civil Relief Act, or any other law, as a condition to offering information regarding options for homeowner’s assistance, or advising servicemembers to intentionally skip payments on their loans to create the appearance of financial difficulties. The guidance notes that servicers found to have engaged in such practices, or otherwise failed to have complied with applicable regulations, will be subject to supervisory and enforcement actions to correct the unlawful practices. Both Director Richard Cordray and the Assistant Director for the Office of Servicemembers Affairs, Holly Petraeus issued public statements. Click here for the CFPB press release.