New rules created to help homeowners

The Consumer Financial Protection Bureau  proposed new rules on Friday to help give homeowners more information on outstanding balances and pending interest rate changes.    When the bureau investigated numerous mortgage servicers, the results were disastrous for the industry as a whole.   It led state A.G.’s (attorney general) to sue Bank of America, Wells Fargo, JP Morgan Chase, Citi and GMAC, eventually ended in a widely-reported $25 billion settlement, aimed to help underwater homeowners.  The bureau wants the new rules to be implemented next January.

Here are some of the new rules proposed:

– Servicers would have to send regular bills to homeowners each billing cycle that spell out payments by principal, interest, fees and escrow; the amount of and due date of the next payment; and warnings about fees.

– Servicers would have to alert homeowners with adjustable rate mortgages that their interest rates are about to change as early as 7 months before the changes kick in.

– Servicers would have to credit homeowners’ mortgage accounts the day payment is received.

– Servicers can’t charge borrowers for emergency  property insurance (force-placed) unless servicers have first alerted homeowners and have a “reasonable basis” that insurance policies were dropped.

– If a homeowner gives the servicer proof of insurance, the servicer has to end the force-placed insurance policy within 15 days and refund any premiums.

– Servicers would have to respond within 5 days of a homeowner’s request for information or complaint of errors.