Regulation X is a federal law that is designed to protect consumers from unfair and abusive practices in the mortgage servicing industry. It was enacted in 2013 by the Consumer Financial Protection Bureau (CFPB), in response to widespread abuses in the wake of the 2008 financial crisis.
The main purpose of Regulation X is to provide borrowers with clear and accurate information about their mortgage loans, and to establish procedures for resolving disputes and addressing errors or mistakes in the servicing of those loans. It covers a wide range of topics, including loan modifications, foreclosure prevention, and the handling of escrow accounts.
One of the key provisions of Regulation X is the requirement that mortgage servicers provide borrowers with a single point of contact (SPOC) for all issues related to their loan. This is intended to simplify the process for borrowers, and to ensure that they are able to communicate effectively with their servicer in the event of a problem or dispute.
In addition to the SPOC requirement, Regulation X also mandates that mortgage servicers follow specific procedures when dealing with delinquent borrowers. For example, they must send regular notices and communications to borrowers to inform them of their options for avoiding foreclosure, and they must provide a reasonable opportunity for borrowers to apply for loan modifications or other forms of assistance.
Regulation X also establishes guidelines for the handling of escrow accounts, which are used to pay property taxes and insurance premiums. Mortgage servicers are required to provide borrowers with detailed annual statements that show the balance of their escrow account, the amounts paid in, and the amounts disbursed. They must also provide timely refunds to borrowers who have overpaid into their escrow accounts.
Overall, Regulation X is an important consumer protection law that helps to ensure that borrowers are treated fairly and transparently by mortgage servicers. If you are a homeowner with a mortgage loan, it is important to be aware of your rights under this regulation and to seek out lenders and servicers who are compliant with these important regulations.
Faro & Crowder, P.A. is experienced in helping consumers protect themselves from overreaching mortgage services. If you believe your mortgage servicer is acting outside the law contact us today to determine what relief may be available to you.