Monthly statements would eliminate loan servicing fraud

Part 3: Can Fed curb abusive lending?

(This is Part 3 of a three-part series. Read Part 1, "New mortgage underwriting rules will be tough to enforce," and Part 2, "Rebates to mortgage brokers rile regulators.") Two previous articles examined the Federal Reserve Board's proposals for tightening underwriting requirements and for limiting broker charges to borrowers. These are longstanding areas of board concern. In contrast, servicing abuses seem to have been discovered by the board only recently. The proposals are weak, but they are a good first step. Proposal one would require that servicers credit payments on the day a payment is received. Proposal two would require servicers to provide accurate payoff statements within a reasonable time to borrowers who intend to pay off their loan. Both are fair, clear and not onerous for the lender. Proposal three would prohibit servicers from imposing late fees or delinquency charges when the scheduled payment is received on time but does not include prior late charges. This rule woul...