ATTORNEY NEWSLETTER
Report Identifies Problems For Surviving Spouses And Family Members
Pressure To Take On New, Higher-Interest Loans
The Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) enacted in 2010. Under Dodd-Frank, the CFPB was charged with protecting consumers against abuses related to home mortgages, personal loans and other forms of consumer financing, credit cards, and other financial products. The CFPB has exclusive authority to enforce federal consumer laws against lenders, mortgage service companies, credit card issuers and other non-banking financial institutions and power to levy fines and seek redress for consumers. 12 U.S.C. § 5514. The CFPB also has exclusive federal consumer law supervisory authority and primary enforcement authority over banks with over $10 billion in assets. 12 U.S.C. § 5515. Ingrid M. Evans and Evans Law Firm, Inc. are California and San Francisco Bay Area consumer and financial elder abuse attorneys who represent consumers, including seniors, who have been the victims of violations of various federal and State consumer protection laws. Ingrid and the firm can be reached by calling (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-80EVANS (888-503-8267).
Consumers can also file complaints directly with the CFPB. The CFPB maintains a consumer hotline at 1(855) 411-2372 and an online complaint process available at https://www.consumerfinance.gov/complaint/getting-started/.
Recent CFPB Report
The CFPB recently issued a report on the experiences of homeowners dealing with their mortgage company after divorce or the death of an original borrower. Many homeowners report that their mortgage servicers push them to take on new, higher-interest loans instead of keeping their existing mortgage. Homeowners also report recurring requests from servicers for the same or updated documents extending over months and sometimes years, at the same time they are dealing with the death of a loved one or a divorce.
Each year, many Americans become homeowners following the death of a spouse or family member, or through divorce. If there is a mortgage on the home, these homeowners must make sure the mortgage payments are made on time to avoid foreclosure. Federal rules and mortgage program guidelines require servicers to help these successor homeowners get information on the existing mortgage, including how to make payments and evaluation for help making their payments through a loan modification, if necessary.
The process for surviving spouses and family members is not so simple, however. Based on its review of consumer complaints, the CFPB has identified multiple areas of concern, including:
Pressure to take out higher-interest loans: Homeowners report servicers telling them they must refinance their mortgages at today’s higher interest rates even though federal mortgage guidelines allow them to maintain the existing loan terms.
Repeated delays and paperwork requests: Many homeowners report waiting months or even years for servicers to process their paperwork, with some reporting that servicers repeatedly request the same documentation or fail to respond to inquiries.
Refusals to release the original borrower from liability: Some homeowners report that servicers are denying their requests to remove the original borrower from the mortgage, even when the successor homeowner has been making all payments on the mortgage for years.
Risks to domestic violence survivors: Survivors of domestic violence have reported that servicers continue sending account information to their abusers and require their abusers’ consent for account changes, potentially creating safety threats.
The CFPB has previously taken action to protect homeowners who are successors in interest. As part of the CFPB’s 2013 mortgage servicing regulations, the CFPB established requirements for mortgage servicers to facilitate communications with successors in interest who are surviving family members. Under the regulations, homeowners have the right to clear, consistent, and timely information from mortgage servicers. Homeowners who get the runaround or experience pressure to refinance an existing mortgage on their home should file a complaint with the CFPB. Homeowners can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Contact Us
Ingrid M. Evans and the other California and San Francisco consumer, securities, financial elder abuse and annuity and life insurance attorneys can be reached at Evans Law Firm, Inc. by calling (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our toll-free number is 1-888-80EVANS (888-503-8267). Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
