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News & Press: Regulatory

8-4-15 CFPB Issues Bulletin on PMI Disclosures

Tuesday, August 4, 2015   (0 Comments)
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Today the CFPB issued a bulletin highlighting some of the violations that it has uncovered during supervisory examinations of banks and servicers with regard to private mortgage insurance. Among other things, the CFPB noted that certain servicers: (1) improperly pegged PMI cancellation to the current value of the property as opposed to the original value; (2) failed to timely refund excess PMI payments upon cancellation and instead held the monies indefinitely in escrow; (3) failed to send annual disclosures to borrowers and (4) adhered to investor guidelines even when those guidelines conflicted with requirements under the HPA (homeowners protection act).

 

It is definitely important for internal compliance and legal to be aware of these trends and ensure that their own processes are in compliance with respect to PMI. Bulletins are often precursors to enforcement action, so this should be a warning shot for any servicer or bank which has these issues.

 

 August 4, 2015 CFPB Servicing Bulletin - Private Mortgage Insurance Cancellation & Termination .pdf

 


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