The Federal Reserve Board, CFPB, FDIC, OCC, National Credit Union Administration and state financial regulators alerted mortgage servicers that they will resume their respective pre-pandemic supervisory and enforcement approaches towards noncompliance with Regulation X (the "Real Estate Settlement Procedures Act "). The agencies stated that their April 2020 supervisory and enforcement statement concerning Regulation X is no longer in effect.
As previously covered, the April 2020 joint statement clarified that the agencies would implement a more "flexible" supervisory and enforcement approach regarding mortgage servicers' compliance with Regulation X during the COVID-19 pandemic. The agencies specified that this approach included the non-pursuance of enforcement action against mortgage servicers for (i) failing to submit an acknowledgment notice within five days of receipt of an incomplete application and (ii) delays in certain notices and the submission of annual escrow statements.
The agencies declared that mortgage servicers have had sufficient time since the issuance of the April 2020 statement to modify their operations and establish "more robust business continuity and remote work capabilities." As such, the agencies stated, they will resume the use of their respective authorities to take supervisory and enforcement action against mortgage servicers that are not in compliance with Regulation X.
Acknowledging that the challenges arising from the COVID-19 pandemic still persist, the agencies stated that they will take into account the specific issues faced by a servicer when determining whether to take a supervisory or enforcement action.
In a related report, the CFPB detailed its efforts on mortgage servicing during the pandemic.
Primary Sources
- FIL-73-2021 - Joint Statement on Supervisory and Enforcement Practices regarding the Mortgage Servicing Rules in Response to the Continuing COVID-19 Pandemic and CARES Act
- FRB, CFPB, FDIC, NCUA, OCC, State Regulators Joint Statement: Joint Statement on Supervisory and Enforcement Practices regarding the Mortgage Servicing Rules in Response to the Continuing COVID-19 Pandemic and CARES Act
- CFPB Report: Mortgage Servicing Efforts in Response to the COVID-19 Pandemic
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