[Federal Register Volume 82, Number 90 (Thursday, May 11, 2017)]
[Proposed Rules]
[Pages 21952-21956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09361]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / 
Proposed Rules  

[[Page 21952]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1024

[Docket No. CFPB-2017-0012]


Request for Information Regarding 2013 Real Estate Settlement 
Procedures Act Servicing Rule Assessment

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice of assessment of 2013 RESPA servicing rule and request 
for public comment.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
conducting an assessment of the Mortgage Servicing Rules Under the Real 
Estate Settlement Procedures Act (Regulation X), as amended prior to 
January 10, 2014, in accordance with section 1022(d) of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act. The Bureau is 
requesting public comment on its plans for assessing this rule as well 
as certain recommendations and information that may be useful in 
conducting the planned assessment.

DATES: Comments must be received on or before: July 10, 2017.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2017-
0012, by any of the following methods:
     Electronic: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Email: [email protected]. Include Docket 
No. CFPB-2017-0012 in the subject line of the email.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 
20552.
     Hand Delivery/Courier: Monica Jackson, Office of the 
Executive Secretary, Consumer Financial Protection Bureau, 1275 First 
Street NE., Washington, DC 20002.
    Instructions: All submissions should include the document title and 
docket number. Because paper mail in the Washington, DC area and at the 
Bureau is subject to delay, commenters are encouraged to submit 
comments electronically. In general, all comments received will be 
posted without change to http://www.regulations.gov. In addition, 
comments will be available for public inspection and copying at 1275 
First Street NE., Washington, DC 20002 on official business days 
between the hours of 10 a.m. and 5 p.m. Eastern Time. You can make an 
appointment to inspect the documents by telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or Social 
Security numbers, should not be included. Comments generally will not 
be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Erik Durbin, Senior Economist; Laura 
A. Johnson, Senior Counsel; Laurie Maggiano, Servicing and Secondary 
Markets Program Manager; Division of Research, Markets, and Regulations 
at (202) 435-9243.

SUPPLEMENTARY INFORMATION: 

I. Background

    Congress established the Bureau in the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act).\1\ In the Dodd-
Frank Act, Congress generally consolidated in the Bureau the rulemaking 
authority for Federal consumer financial laws previously vested in 
certain other Federal agencies. Congress also provided the Bureau with 
the authority to, among other things, prescribe rules as may be 
necessary or appropriate to enable the Bureau to administer and carry 
out the purposes and objectives of the Federal consumer financial laws 
and to prevent evasions thereof.\2\ Since 2011, the Bureau has issued a 
number of rules adopted under Federal consumer financial law.\3\
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 12 U.S.C. 5512(b)(1).
    \3\ 12 U.S.C. 5512(d).
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    Section 1022(d) of the Dodd-Frank Act requires the Bureau to 
conduct an assessment of each significant rule or order adopted by the 
Bureau under Federal consumer financial law. The Bureau must publish a 
report of the assessment not later than five years after the effective 
date of such rule or order. The assessment must address, among other 
relevant factors, the rule's effectiveness in meeting the purposes and 
objectives of title X of the Dodd-Frank Act and the specific goals 
stated by the Bureau. The assessment must reflect available evidence 
and any data that the Bureau reasonably may collect. Before publishing 
a report of its assessment, the Bureau must invite public comment on 
recommendations for modifying, expanding, or eliminating the 
significant rule or order.
    In January 2013, the Bureau issued the ``Mortgage Servicing Rules 
Under the Real Estate Settlement Procedures Act (Regulation X)'' (2013 
RESPA Servicing Final Rule).\4\ The Bureau amended the 2013 RESPA 
Servicing Final Rule on several occasions before it took effect on 
January 10, 2014.\5\ As discussed further below, the Bureau has 
determined that the 2013 RESPA Servicing Final Rule and all the 
amendments related to it that the Bureau made that took effect on 
January 10, 2014 collectively make up a significant rule for purposes 
of section 1022(d). The Bureau will conduct an assessment of the 2013 
RESPA Servicing Final Rule as so amended, which this document refers to 
as the ``2013 RESPA Servicing Rule.'' In this document, the Bureau is 
requesting public comment on the issues identified below regarding the 
2013 RESPA Servicing Rule.
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    \4\ 78 FR 10695 (Feb. 14, 2013). In January 2013, the Bureau 
also issued separate ``Mortgage Servicing Rules Under the Truth in 
Lending Act (Regulation Z)'' (2013 TILA Servicing Final Rule). 78 FR 
10901 (Feb. 14, 2013). As discussed below, the Bureau has determined 
that the 2013 TILA Servicing Final Rule is not a significant rule 
(either individually or collectively with any amendments to the 2013 
TILA Servicing Final Rule that took effect on January 10, 2014) for 
purposes of Dodd-Frank Act section 1022(d). Therefore, the Bureau is 
not seeking comment on the 2013 TILA Servicing Final Rule or its 
related subsequent amendments in this document.
    \5\ See infra note 9.
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II. Assessment Process

    Assessments pursuant to section 1022(d) of the Dodd-Frank Act are 
for informational purposes only and are not part of any formal or 
informal rulemaking proceedings under the Administrative Procedure Act. 
The Bureau plans to consider relevant comments and other information 
received as it conducts the assessment

[[Page 21953]]

and prepares an assessment report. The Bureau does not, however, expect 
that it will respond in the assessment report to each comment received 
pursuant to this document. Furthermore, the Bureau does not anticipate 
that the assessment report will include specific proposals by the 
Bureau to modify any rules, although the findings made in the 
assessment will help to inform the Bureau's thinking as to whether to 
consider commencing a rulemaking proceeding in the future.\6\ Upon 
completion of the assessment, the Bureau plans to issue an assessment 
report no later than January 10, 2019.
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    \6\ The Bureau announces its rulemaking plans in semiannual 
updates of its rulemaking agenda, which are posted as part of the 
Federal government's Unified Agenda of Regulatory and Deregulatory 
Actions. See Off. of Info. and Reg. Affairs, Off. of Mgmt. and 
Budget, Current Regulatory Plan and the Unified Agenda of Regulatory 
and Deregulatory Actions, http://www.reginfo.gov/public/do/eAgendaMain (last visited Mar. 22, 2017).
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III. The 2013 RESPA Servicing Rule

    Congress adopted the Dodd-Frank Act in response to an unprecedented 
cycle of expansion and contraction in the mortgage market that sparked 
the most severe U.S. recession since the Great Depression. In the Dodd-
Frank Act, Congress enacted a number of new provisions governing the 
origination and servicing of consumer mortgages. Beginning in 2013, the 
Bureau issued several final rules to implement these new statutory 
provisions. Those rules generally took effect in January 2014.
    In January 2013, the Bureau issued the 2013 RESPA Servicing Final 
Rule.\7\ The 2013 RESPA Servicing Final Rule contained a number of new 
borrower protections, which are summarized below. After finalizing the 
rule, consistent with its obligations under section 1022(c) of the 
Dodd-Frank Act, the Bureau continued to monitor the mortgage servicing 
market and consider whether changes to the 2013 RESPA Servicing Final 
Rule were appropriate.\8\ During 2013, the Bureau amended the rule to 
address important questions raised by industry, consumer advocacy 
groups, and other stakeholders.\9\ As noted above, the effective date 
of the 2013 RESPA Servicing Rule, including these amendments, was 
January 10, 2014.\10\
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    \7\ 78 FR 10695 (Feb. 14, 2013). In January 2013, the Bureau 
also issued the 2013 TILA Servicing Final Rule. 78 FR 10901 (Feb. 
14, 2013). The Bureau amended the 2013 TILA Servicing Final Rule on 
several occasions before it took effect on January 10, 2014. Infra 
note 9. As discussed below, the Bureau has determined that the 2013 
TILA Servicing Final Rule is not a significant rule (either 
individually or collectively with any amendments to the 2013 TILA 
Servicing Final Rule that took effect on January 10, 2014) for 
purposes of Dodd-Frank Act section 1022(d). Therefore, the Bureau is 
not seeking comment on the 2013 TILA Servicing Final Rule or its 
related subsequent amendments in this document.
    \8\ Section 1022(c) provides that, to support its rulemaking and 
other functions, the Bureau shall monitor for risks to consumers in 
the offering or provision of consumer financial products or 
services, including developments in the markets for such products or 
services.
    \9\ In the summer and fall of 2013 the Bureau finalized the (1) 
Amendments to the 2013 Mortgage Rules under the Real Estate 
Settlement Procedures Act (Regulation X) and the Truth in Lending 
Act (Regulation Z) (July 2013 Mortgage Final Rule) and (2) 
Amendments to the 2013 Mortgage Rules under the Equal Credit 
Opportunity Act (Regulation B), Real Estate Settlement Procedures 
Act (Regulation X), and the Truth in Lending Act (Regulation Z) 
(September 2013 Mortgage Final Rule). 78 FR 44685 (July 24, 2013); 
78 FR 60381 (Oct. 1, 2013). In October 2013, the Bureau clarified 
compliance requirements in relation to successors in interest, early 
intervention requirements, bankruptcy law, and the Fair Debt 
Collection Practices Act (FDCPA), through an Interim Final Rule 
(IFR) and a contemporaneous compliance bulletin. Amendments to the 
2013 Mortgage Rules under the Real Estate Settlement Procedures Act 
(Regulation X) and the Truth in Lending Act (Regulation Z), 78 FR 
62993 (Oct. 23, 2013); Bureau of Consumer Fin. Prot., CFPB Bulletin 
2013-12, Implementation Guidance for Certain Mortgage Servicing 
Rules (Oct. 15, 2013), available at http://files.consumerfinance.gov/f/201310_cfpb_mortgage-servicing_bulletin.pdf.
    \10\ After the January 10, 2014 effective date of the rules 
described above, the Bureau made additional changes to the rule. In 
October 2014, the Bureau added an alternative definition of small 
servicer that exempted nonprofit entities that meet certain 
requirements from certain provisions of the 2013 RESPA Servicing 
Final Rule, as well as from other requirements. Amendments to the 
2013 TILA Servicing Final Rule, 79 FR 65299 (Nov. 3, 2014). The 
effective date of that rule was November 3, 2014. In August 2016, 
the Bureau issued numerous additional amendments to provisions of 
the 2013 RESPA Servicing Final Rule. Amendments to the 2013 Mortgage 
Rules under the Real Estate Settlement Procedures Act (Regulation X) 
and the Truth in Lending Act (Regulation Z), 81 FR 72160 (Oct. 19, 
2016). The effective dates of these amendments are October 19, 2017 
and April 19, 2018, depending on the specific requirements. In this 
document, the Bureau is not seeking comment on the amendments to the 
mortgage servicing rules that became or will become effective after 
the January 10, 2014 effective date of the 2013 RESPA Servicing 
Rule.
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    The 2013 RESPA Servicing Rule in part implements section 1463 of 
the Dodd-Frank Act, which amended RESPA. Section 1463(a) imposed new 
mortgage servicing requirements and prohibitions under RESPA on 
servicers of federally related mortgage loans with respect to force-
placed insurance, borrower assertions of error, and borrower requests 
for information.\11\ It also provided the Bureau authority to establish 
obligations on servicers of federally related mortgage loans 
appropriate to carry out the consumer protection purposes of RESPA. The 
Bureau also has the authority under RESPA to prescribe such rules and 
regulations, to make such interpretations, and to grant such reasonable 
exemptions for classes of transactions as may be necessary to achieve 
the purposes of RESPA.\12\ Accordingly, the 2013 RESPA Servicing Rule 
included not only provisions that implemented the specific Dodd-Frank 
Act requirements mentioned above but also provisions regarding 
servicing policies and procedures, early intervention with delinquent 
borrowers, continuity of contact with delinquent borrowers, and loss 
mitigation procedures, as well as certain exemptions, all of which the 
Bureau found to be appropriate to carry out or necessary to achieve the 
purposes of RESPA and title X and prevent evasion of those laws.
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    \11\ For example, the 2013 RESPA Servicing Rule's force-placed 
insurance provisions implement sections 6(k)(1)(A), 6(k)(2), 6(l) 
and 6(m) of RESPA, which were added by section 1463 of the Dodd-
Frank Act. The 2013 RESPA Servicing Rule's error resolution and 
information request provisions implement section 6(k)(1)(B) through 
(D) of RESPA, which was added by section 1463 of the Dodd-Frank Act. 
The Dodd-Frank Act also imposed certain new requirements under TILA 
relating to mortgage servicing, and the Bureau issued rules in 
TILA's implementing Regulation Z. As noted above and below, the 
Bureau is not seeking comment on the 2013 TILA Servicing Final Rule 
or its related subsequent amendments in this document.
    \12\ 12 U.S.C. 2617(a).
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A. Major Provisions of the Servicing Rule

    The 2013 RESPA Servicing Rule addressed six major topics, which are 
summarized below. Many of these requirements do not apply to small 
servicers, generally defined as servicers that service 5,000 mortgage 
loans or fewer and only service mortgage loans the servicer or an 
affiliate owns or originated.\13\ Small servicers are exempt from: 
Certain requirements relating to obtaining force-placed insurance; the 
provisions relating to general servicing policies, procedures, and 
requirements; and certain requirements and restrictions relating to 
communicating with borrowers about, and evaluation of, loss mitigation 
applications.
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    \13\ See 12 CFR 1024.30(b)(1); 12 CFR 1026.41(e)(4).
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    1. Force-placed insurance. The rule prohibits servicers from 
charging a borrower for force-placed insurance coverage unless the 
servicer has a reasonable basis to believe the borrower has failed to 
maintain hazard insurance required by the loan agreement. Where the 
borrower has an escrow account for the payment of hazard insurance 
premiums, the servicer is prohibited from obtaining force-placed 
insurance where the servicer can continue the borrower's homeowner 
insurance, even if the servicer needs to advance funds to the 
borrower's escrow account to do so. The rule also requires servicers to 
send

[[Page 21954]]

two notices before charging the borrower for force-placed insurance 
coverage and provides other requirements regarding force-placed 
insurance.
    2. Error resolution and information requests. The rule requires 
servicers to comply with certain error resolution procedures for 
written notices of error relating to the servicing of a mortgage loan. 
Servicers generally are required to acknowledge the notice of error 
within five days and to investigate and respond in writing within 30 
days, either correcting the error or notifying the borrower that no 
error occurred. Similar procedures and timeframes apply to servicer 
acknowledgment of and response to borrower written requests for 
information.
    3. General servicing policies, procedures, and requirements. The 
rule requires servicers to establish policies and procedures reasonably 
designed to achieve objectives specified in the rule.
    4. Early intervention with delinquent borrowers. The rule generally 
requires servicers to establish or make good faith efforts to establish 
live contact with borrowers by the 36th day of their delinquency (for 
each billing cycle for which a payment sufficient to cover principal, 
interest, and, if applicable, escrow is due and unpaid) and to promptly 
inform such borrowers, where appropriate, that loss mitigation options 
may be available. In addition, servicers must generally provide 
borrowers a written notice with information about loss mitigation 
options by the 45th day of their delinquency.
    5. Continuity of contact with delinquent borrowers. The rule 
requires servicers to maintain reasonable policies and procedures with 
respect to providing delinquent borrowers with access to personnel to 
assist them with loss mitigation options where applicable.
    6. Loss mitigation procedures. The rule requires servicers to 
follow specified loss mitigation procedures for a mortgage loan secured 
by a borrower's principal residence. Servicers generally must provide a 
written notice acknowledging receipt of a borrower's loss mitigation 
application within five days and exercise reasonable diligence in 
obtaining documents and information to complete the application. For a 
complete loss mitigation application received more than 37 days before 
a foreclosure sale, the rule requires the servicer to evaluate the 
borrower, within 30 days, for all loss mitigation options available to 
the borrower in accordance with the investor's eligibility rules. The 
rule also prohibits a servicer from making the first notice or filing 
required by applicable law for any judicial or nonjudicial foreclosure 
process until a mortgage loan is more than 120 days delinquent and 
places certain restrictions on ``dual tracking,'' where a servicer is 
simultaneously processing a consumer's loss mitigation application at 
the same time that it advances the foreclosure process.

B. Significant Rule Determination

    The Bureau has determined that the 2013 RESPA Servicing Rule is a 
significant rule for purposes of Dodd-Frank Act section 1022(d). The 
Bureau makes this determination partly on the basis of the estimated 
aggregate annual cost to industry of complying with the rule.\14\ The 
rule mandated a large number of changes in the features of mortgage 
servicing, including new disclosures for force-placed insurance, an 
expanded error resolution regime, and new servicing procedures and 
requirements that apply to all servicing of delinquent loans, including 
mandated timelines and procedural rights in loss mitigation. These 
changes in turn required multiple changes in business operations, 
including adjustments in technology, training and compliance. The 
Bureau noted in the preamble to the 2013 RESPA Servicing Final Rule 
that these changes would require servicers to make changes to systems 
and procedures and that the new requirements could require servicers to 
increase staffing time devoted to certain activities and to hire more 
staff.\15\ Taking all of these factors into consideration, the Bureau 
has concluded that the 2013 RESPA Servicing Rule is ``significant'' for 
purposes of Dodd-Frank Act section 1022(d).
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    \14\ In the Paperwork Reduction Act (PRA) Analysis published 
with the 2013 RESPA Servicing Final Rule, the Bureau estimated an 
additional 1,100,000 in ongoing burden hours (as well as an 
additional 29,000 in one-time burden hours) from the 2013 RESPA 
Servicing Final Rule. 78 FR 10695, 10873 (Feb. 14, 2013). In the 
Supporting Statement submitted to OMB, the Bureau valued the ongoing 
burden hours at $19.00 per hour. Thus, there was approximately $20.9 
million in additional ongoing PRA burden from the 2013 RESPA 
Servicing Final Rule. In addition, the Bureau estimated that the 
2013 RESPA Servicing Final Rule would increase the cost of servicing 
distressed loans subject to the new requirements in ways not 
included in the PRA burden, and estimated that these additional 
costs would total at least $90 million. See U.S. Gov't 
Accountability Off., GAO-14-67, Dodd-Frank Regulations: Agencies 
Conducted Regulatory Analyses and Coordinated but Could Benefit from 
Additional Guidance on Major Rules, at 18-19 (Dec. 11, 2013), 
available at http://www.gao.gov/products/GAO-14-67.
    \15\ See 78 FR 10695, 10847-60 (Feb. 14, 2013).
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    The 2013 TILA Servicing Final Rule became effective at the same 
time as the 2013 RESPA Servicing Rule. The Bureau has determined that 
the 2013 TILA Servicing Final Rule is not a significant rule (either 
individually or collectively with any amendments to the 2013 TILA 
Servicing Final Rule that took effect on January 10, 2014) for purposes 
of Dodd-Frank Act section 1022(d). The rule implemented the periodic 
statement requirement created by Dodd-Frank Act section 1420, and 
exempted small servicers from this requirement. The rule also required 
a new initial adjustable-rate mortgage notice and revised certain 
existing disclosures and other servicing provisions under the Truth in 
Lending Act. The estimated cost to servicers of complying with the rule 
is small, as set forth in the Bureau's analysis of benefits and costs 
that accompanied the rule.\16\ In this respect, the 2013 TILA Servicing 
Final Rule generally modified important disclosures that consumers were 
already receiving, meaning that additional ongoing costs and 
operational changes to distribute the disclosures are small.\17\ The 
rule did require one-time changes to provide additional important 
information in the disclosures; \18\ however, Bureau outreach generally 
found that vendors would make these changes so the one-time costs would 
be spread over many entities.\19\ The rule's new disclosure 
requirements were intended to help certain groups of consumers make 
better decisions and were not expected to affect competition, 
innovation, or pricing in the mortgage market. These factors lead the 
Bureau to

[[Page 21955]]

conclude that the 2013 TILA Servicing Final Rule is not ``significant'' 
for purposes of section 1022(d).
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    \16\ In the PRA Analysis published with the 2013 TILA Servicing 
Final Rule, the Bureau estimated an additional 56,000 in ongoing 
burden hours (as well as an additional 5,000 in one-time burden 
hours) from the 2013 TILA Servicing Final Rule as well as ongoing 
vendor costs of $5.7 million. 78 FR 10901, 11004 (Feb. 14, 2013). In 
the Supporting Statement submitted to OMB, the Bureau valued the 
ongoing burden hours at $19.00 per hour. Thus, there was 
approximately $6.7 million in additional ongoing PRA burden from the 
2013 TILA Servicing Final Rule. The Bureau's section 1022 (b)(2) 
analysis considered that covered persons might receive less revenue 
through fees and charges as consumers responded to superior 
disclosures, but did not identify these costs as substantial. 78 FR 
10901, 10989.
    \17\ Consumers were already receiving the ARM adjustment notice, 
and the Bureau estimated that the new periodic statement, where 
required, would for the most part replace billing statements that 
consumers were already receiving. Regarding the new initial interest 
rate adjustment disclosure, the Bureau estimated that annual 
production and distribution costs would be $140,000 (50 cents per 
disclosure). 78 FR 10901, 10988 (Feb. 14, 2013).
    \18\ The Bureau noted that the additional information provided 
by the revised ARM adjustment notice and new periodic statement 
might require servicers (more specifically, their vendors) to access 
databases that were not regularly accessed by systems that produced 
the existing disclosures. 78 FR 10901, 10984-85, 10992 (Feb. 14, 
2013).
    \19\ 78 FR 10901, 10985 (Feb. 14, 2013).
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IV. The Assessment Plan

    Because the Bureau has determined that the 2013 RESPA Servicing 
Rule is a significant rule for purposes of Dodd-Frank Act section 
1022(d), section 1022(d) requires the Bureau to assess the rule's 
effectiveness in meeting the purposes and objectives of title X of the 
Dodd-Frank Act and the specific goals stated by the Bureau. Section 
1021 of the Dodd-Frank Act states that the Bureau's purpose is to 
implement and, where applicable, enforce Federal consumer financial law 
consistently for the purpose of ensuring that all consumers have access 
to markets for consumer financial products and services and that 
markets for consumer financial products and services are fair, 
transparent, and competitive. Section 1021 also sets forth the Bureau's 
objectives, which are to ensure that, with respect to consumer 
financial products and services:
     Consumers are provided with timely and understandable 
information to make responsible decisions about financial transactions;
     Consumers are protected from unfair, deceptive, or abusive 
acts and practices and from discrimination;
     Outdated, unnecessary, or unduly burdensome regulations 
are regularly identified and addressed in order to reduce unwarranted 
regulatory burdens;
     Federal consumer financial law is enforced consistently, 
without regard to the status of a person as a depository institution, 
in order to promote fair competition; and
     Markets for consumer financial products and services 
operate transparently and efficiently to facilitate access and 
innovation.
    In the 2013 RESPA Servicing Rule, the Bureau stated that, 
considered as a whole, RESPA, as amended by the Dodd-Frank Act, 
reflects at least two significant consumer protection purposes: (1) To 
establish requirements that ensure that servicers have a reasonable 
basis for undertaking actions that may harm borrowers; and (2) to 
establish servicers' duties to borrowers with respect to the servicing 
of federally related mortgage loans.\20\ The Bureau further stated 
that, specifically with respect to mortgage servicing, the consumer 
protection purposes of RESPA include: (1) Responding to borrower 
requests and complaints in a timely manner; (2) maintaining and 
providing accurate information; (3) helping borrowers avoid unwarranted 
or unnecessary costs and fees; and (4) facilitating review for 
foreclosure avoidance options.\21\ The Bureau further stated that each 
of the provisions adopted in the 2013 RESPA Servicing Rule was intended 
to achieve some or all of these purposes.\22\ The Bureau intends to 
focus the assessment on how well the rule has met these four purposes, 
which it believes are corollaries to certain of the Bureau's five 
objectives set forth in section 1021.
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    \20\ 78 FR 10695, 10709 (Feb. 14, 2013).
    \21\ Id.
    \22\ Id.
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    To assess the effectiveness of the 2013 RESPA Servicing Rule, the 
Bureau plans to analyze a variety of metrics and data to the extent 
feasible. Feasibility will depend on the availability of data and the 
cost to obtain any new data. The Bureau will seek to gather information 
about activities and outcomes including the ones listed below and seek 
to understand how these activities and outcomes relate to each other:
    (1) Servicer activities undertaken to comply with the 2013 RESPA 
Servicing Rule, such as responding to loss mitigation applications or 
responding to borrower notices of error, including the timing of these 
actions;
    (2) Consumer activities, including (a) utilization of the rights 
provided by the 2013 RESPA Servicing Rule, such as assertion of errors, 
submission of loss mitigation applications, submission of complete 
applications, and use of appeals; and (b) consumer actions that may be 
prompted or enabled by the 2013 RESPA Servicing Rule, such as 
additional payments or other consumer responses after early 
intervention by the servicer or consumer verification of hazard 
insurance in response to the 45 day notice sent by the servicer; and
    (3) Consumer outcomes that the 2013 RESPA Servicing Rule sought to 
affect, including, for example, fees and charges assessed and paid, 
incidence and severity of delinquency, how delinquency is resolved, and 
time to resolution of delinquency. The Bureau will seek data that can 
help distinguish negative outcomes that are plausibly avoidable by 
consumers from those that are not.
    The Bureau will seek to understand how these metrics relate to one 
another. In particular, to the extent possible given available data, 
the Bureau will seek to understand how the consumer outcomes described 
in category 3 are affected by the measures of servicer and consumer 
activities described in categories 1 and 2.
    The Bureau intends to place emphasis in the assessment on 
provisions of the 2013 RESPA Servicing Rule that have particular 
relevance to delinquent borrowers. These include provisions governing 
servicers' communication with delinquent borrowers and loss mitigation 
procedures, as well as provisions providing rights that could be 
particularly important to consumers facing payment difficulties, 
including error resolution requirements and requirements applicable to 
force-placed insurance. In conducting the assessment the Bureau plans 
to focus its resources, particularly with respect to efforts to collect 
new data, on these provisions. The Bureau anticipates addressing other 
provisions of the 2013 RESPA Servicing Rule to the extent that data are 
already available to the Bureau, provided by commenters in response to 
this document, or identified by commenters and reasonably available.
    In conducting the assessment, the Bureau will seek to compare 
servicer and consumer activities and outcomes to a baseline that would 
exist if the 2013 RESPA Servicing Rule's requirements were not in 
effect. Doing so is challenging because the Bureau cannot observe the 
activities and outcomes of an unregulated ``control'' group, i.e., of a 
representative group of servicers that are exempt from the 2013 RESPA 
Servicing Rule.\23\ In some cases the Bureau may have access to data 
from before the effective date of the 2013 RESPA Servicing Rule that is 
informative about the outcomes absent the 2013 RESPA Servicing Rule. In 
other cases there may be institutional factors that indicate what one 
would expect to observe absent the 2013 RESPA Servicing Rule's 
requirements, for example, where servicer incentives absent the rule 
are very clear. Even if one can observe a clear association between 
activities that the rule requires and consumer outcomes, the Bureau 
recognizes that some of those activities might also be required by 
consent orders, State law, or private contracts. In these cases, the 
impacts one observes may reflect these other requirements in addition 
to those of the rule. The Bureau will draw conclusions as supported by 
the data, taking into account that factors

[[Page 21956]]

other than the rule itself may affect observable outcomes.
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    \23\ Exempt entities can serve as a limited type of control 
group. While small servicers are exempt from many provisions of the 
2013 RESPA Servicing Rule, the Bureau understands that many small 
servicers follow a business model that differs in important respects 
from that of larger servicers, which may make small servicers an 
ineffective control group. The Bureau plans to explore whether small 
servicers that fall just below the 5,000-loan cutoff might serve as 
an effective control group to analyze the effectiveness of those 
provisions of the 2013 RESPA Servicing Rule from which small 
servicers are exempt.
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    The Bureau has data sources, currently available or in development, 
with which to undertake these analyses, and the Bureau is also planning 
to secure additional data. These data sources include the National 
Mortgage Database (NMDB) and the American Survey of Mortgage Borrowers 
(ASMB),\24\ data from consumer complaints submitted to the Bureau, 
servicing data from a private vendor, and applicable information 
obtained from Bureau supervision and enforcement activities. The Bureau 
is also exploring the availability and utility of other sources of 
administrative data for conducting the assessment.
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    \24\ The NMDB and the ASMB are multi-year projects being jointly 
undertaken by the Federal Housing Finance Agency (FHFA) and the 
Bureau. See Fed. Hous. Fin. Agency, National Mortgage Database, 
http://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/National-Mortgage-Database.aspx (last visited Mar. 22, 2017); Fed. Hous. Fin. 
Agency, American Survey of Mortgage Borrowers, http://www.fhfa.gov/PolicyProgramsResearch/Programs/Pages/American-Survey-of-Mortgage-Borrowers.aspx (last visited Mar. 22, 2017); Bureau of Consumer Fin. 
Prot., Technical Reports: National Survey of Mortgage Originations 
and National Mortgage Database, http://www.consumerfinance.gov/data-research/research-reports/technical-reports-national-survey-of-mortgage-borrowers-and-national-mortgage-database/(last visited Mar. 
22, 2017).
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    The Bureau intends to seek input from housing counselors, legal aid 
attorneys, and mortgage servicers as it analyzes the data described 
above and interprets the findings. The Bureau is also seeking to obtain 
deidentified loan-level data from a small number of servicers. This 
would potentially allow the Bureau to correlate mandated servicer 
activity (e.g., the early intervention requirements of the 2013 RESPA 
Servicing Rule) with consumer activity (e.g., additional consumer 
payments or additional loss mitigation applications occurring shortly 
after early intervention communications). It would also potentially 
allow the Bureau to correlate consumer and servicer activity with the 
measures of immediate consumer outcomes discussed earlier (fees and 
charges, delinquency resolution, time to resolution).

V. Request for Comment

    To inform the assessment, the Bureau hereby invites members of the 
public to submit information and other comments relevant to the issues 
identified below, as well as any information relevant to assessing the 
effectiveness of the 2013 RESPA Servicing Rule in meeting the purposes 
and objectives of title X of the Dodd-Frank Act (section 1021) and the 
specific goals of the Bureau (enumerated above). In particular, the 
Bureau invites the public, including consumers and their advocates, 
housing counselors, mortgage loan servicers and other industry 
representatives, industry analysts, and other interested persons to 
submit the following:
    (1) Comments on the feasibility and effectiveness of the assessment 
plan, the objectives of the 2013 RESPA Servicing Rule that the Bureau 
intends to emphasize in the assessment, and the outcomes, metrics, 
baselines, and analytical methods for assessing the effectiveness of 
the rule as described in part IV above;
    (2) Data and other factual information that may be useful for 
executing the Bureau's assessment plan, as described in part IV above;
    (3) Recommendations to improve the assessment plan, as well as 
data, other factual information, and sources of data that would be 
useful and available to execute any recommended improvements to the 
assessment plan;
    (4) Data and other factual information about the benefits and costs 
of the rule for consumers, servicers, and others in the mortgage 
industry; and about the effects of the rule on transparency, 
efficiency, access, and innovation in the mortgage market;
    (5) Data and other factual information about the rule's 
effectiveness in meeting the purposes and objectives of title X of the 
Dodd-Frank Act (section 1021), which are listed in part IV above; and
    (6) Recommendations for modifying, expanding or eliminating the 
2013 RESPA Servicing Rule.

    Dated: April 29, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-09361 Filed 5-10-17; 8:45 am]
BILLING CODE 4810-AM-P