WASHINGTON, D.C. – Today, federal and state agencies joined together in reaching an agreement that addresses mortgage servicing and foreclosure abuses by the nation’s five largest mortgage servicers. The settlement will provide $25 billion in financial relief to distressed homeowners and establish new servicer standards of conduct. Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), issued the following statement:
“Widespread failures in the mortgage servicing industry have been well-documented. All too often, paperwork was lost, phone calls went unanswered, errors were not resolved, or documents were falsified. As a result, some families who qualified for loan modifications did not receive them in time to stop foreclosure.
“Today’s $25 billion settlement will help many struggling homeowners across the country stay in their homes. Under the terms of the agreement, the largest five servicers must adhere to new consumer protections and provide customers with options for avoiding the pain of foreclosure.
“Going forward, the Consumer Bureau will be examining servicers throughout the industry to make sure they are following the law. We will also be issuing rules to bring greater fairness and transparency to the mortgage servicing marketplace. And where we find unlawful practices, we will not hesitate to use our full authority to protect consumers and hold all servicers accountable.”
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.