MORTGAGE SERVICER SETTLES WITH CFPB
The CFPB issued a consent order against Seterus, Inc. and Kyanite Services, Inc., as Seterus’s successor in interest, based on the CFPB’s finding that Seterus violated the Consumer Financial Protection Act of 2010 (CFPA) and Regulation X. The CFPB found that Seterus’s actions resulted in delaying or depriving some borrowers of a reasonable opportunity to get their loss mitigation applications completed and evaluated and in some borrowers' failing to timely receive protections against prohibited foreclosure activities to which they were legally entitled. The order requires Kyanite to pay $4,932,525 in total redress to approximately 11,866 of the consumers to whom Seterus sent a defective acknowledgment notice. The order also imposes a $500,000 civil money penalty and includes injunctive relief that would apply in the event Kyanite engages in mortgage servicing. At its height, Seterus, a former mortgage servicer based in North Carolina, serviced approximately 500,000 residential mortgage loans. Seterus is no longer operating. On February 28, 2019, after the relevant period covered by the CFPB’s investigation, Seterus was sold and its entire mortgage servicing portfolio was transferred to Nationstar Mortgage LLC, doing business as Mr. Cooper, with which the CFPB reached a separate settlement earlier this month.
CFPB: SECOND PIECE OF FDCPA FINAL RULE ISSUED
On December 18, 2020, the CFPB announced a final rule to implement Fair Debt Collection Practices Act (FDCPA) requirements regarding certain disclosures for consumers. The rule requires debt collectors to provide, at the outset of collection communications, detailed disclosures about the consumer’s debt and rights in debt collection, along with information to help consumers respond. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers, orally, in writing, or electronically, before reporting information about the debt to a consumer reporting agency. The rule prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt. The rule will become effective on November 30, 2021, with the rule reissuing Regulation F published on November 30, 2020.
46 MORTGAGE BANKER | JANUARY 2021
