I think the penalties should be at least 5%.
Maybe they aren't a deterrent *now.* I do know their funding is cut under different presidents and that effects their effectiveness because they either delay or just don't prosecute according to funding. I think they took the complaints down under Tump last time. They were back up last I checked this past year but most of the data was knocked out. Its like Ocwen managed to remove its name and this was before PHH came along. They were making headway with monitoring but those days are gone.
I do think these the laws need oversite and teeth. The climate changed on it.
However, the mortgage servicing rules aid my affirmative counter-claims and have definitely helped others moving forward. We needed those badly and just implementing them was a warning and they stopped certain practices investigating of those complaints that are now missing, but that progress came with lawsuits, settlements and monitoring. Now we have the conditions precedent, pre-foreclosure at 6 months, and have defined applying payments in spite of a late fee or bogus charges and rules for removing forced placed insurance.
CFPB did identify the unfair practices and made rules to address them. Now this may not benefit me or you because we already went through the "we want your house" foreclosure funnel of the great recession. CFpB didn't finalize and implement the MS rules until 2014. That was mainly due to financial services lobby needing or wanting delays, cause, you know, MONEY.
I'm just glad we (the law and US) got some precedent on servicing and modifications before the pandemic. They had already done it and made improvements this time around.
But I think you still missed the point. CFPB makes RULES, they cannot make LAWS. So, the CFPB was still the only entity that had any authority to pursue action based on their rules. And if you look at the complaints they received, they acted on next to none of them. So, right there, most of us have been hung out to dry.
And then, what happens when they do get a consent judgment? One, it only affects that one servicer or pretender. This is useless for everyone else because, without a law to point to, 100% of the other pretenders can keep on violating that same rule with no actual consequences. But then again, when they do get a consent judgment, even the one pretender they caught with it is often found later on to still be continuing the same rule violations and they get a mere slap on the wrist when they get caught--IF they get caught.
But perhaps the biggest wrong that the CFPB has put on all of us is this--in every consent judgment, the offending pretender NEVER has to be held accountable. They ALWAYS refuse to admit any wrongdoing, and the CFPB allows it just to get money in their own pockets. If you look at these consent judgments, they often require the offender to pay some money directly to the CFPB as a penalty. So, they're not in this game for you, me, or anyone else but themselves.
A perfect example of this is Fay Servicing. In 2017, the CFPB issued a consent order against Fay for mulitple violations of laws, including dual tracking, failing to inform borrowers of required protection disclosures and so on. Fay was ordered to stop all illegal foreclosure practices and pay out $1.15 million to borrowers who were affected by these violations:
On June 7, 2017, the Bureau issued an order against Fay Servicing, LLC.
www.consumerfinance.gov
Seven years later, in 2024, the CFPB found that Fay had not done any of the required changes of operations as stated in the 2017 consent order--it was still violating all the protection laws for homeowners. This time, they ordered Fay to pay $3 million to borrowers, $2 million as a civil penalty to the CFPB, and to invest $2 million to update its internal technology to better be able to comply:
On August 21, 2024, the Bureau issued an order against Fay Servicing, LLC, a residential mortgage servicer headquartered in Tampa, Florida.
www.consumerfinance.gov
There's no teeth there for Fay, who brought in a total revenue of $137.5 million in just 2023 alone. Giving up $7 million may seem like a lot, but when they have been profiting illegally for 7 years off of these tactics WHILE UNDER CONSENT ORDER, it's just another cost of business to them. Now, the CFPB has TWICE determined that Fay is committing the exact same violations of law to illegally foreclose on homeowners, and yet, they are still able to keep committing those same violations again and again.
We don't need more beaurocracy to hit them with relatively insignificant penalties. We need someone to hold them directly accountable when they break the law--and to stop them from doing so when they show that they have no intention of changing. And the CFPB has actually enabled this to continue. How many of us filed CFPB complaints thinking we were going to get some backing finally?? And how many of us actually did? None. I filed a CFPB complaint and all the servicer needed to do to get the complaint closed was lie. I even produced documentation--the servicer's own, in fact--proving that their response was a lie and the CFPB simply said they responded so we're closing the case. Nothing was ever done. Has anyone here actually gotten a consent order because of a CFPB complaint? Anyone?
Didn't think so.
And that's our tax dollars being wasted. When you look at this from the point of view of, say, a business, it becomes clear that the cost-benefit analysis proves the CFPB is a money drain and nothing more. And while I understand what you're saying about funding, the actual business model for the CFPB prevents them from ever having the teeth they need to accomplish anything. Before their funding was ever cut, they followed the exact same pattern as they have done. The big bank lobby was in it from day one. The CFPB was never going to be allowed to have any real authority--even Elizabeth Warren, who spent lots of time campaigning for the CFPB and speaking about its necessity, in the end, voted against it ever having any real authority. She talks a lot in front of the cameras, sure, but when it's time to actually act, she folded like everyone else did.
In the end, they have determined we all are expendable.
www.mcguirewoods.com
www.chapman.com
