Industry News

Bill would tighten rules for mortgage servicers, appraisers

New RESPA requirements for loan servicers proposed

A new bill aimed at cracking down on deceptive practices in mortgage servicing and coercion of appraisers has the support of consumer groups and a group representing appraisers. Introduced Tuesday by Rep. Paul Kanjorski, HR 3837 -- the Escrow, Appraisal, and Mortgage Servicing Improvements Act -- would update the Real Estate Settlement Procedures Act (RESPA) to create new requirements for mortgage servicers. The bill would require escrow accounts on high-cost loans to be used to make property tax and insurance payments, place restrictions on "force-placed" insurance, and require loan servicers to respond more quickly when borrowers report errors in their payment histories. The National Community Reinvestment Coalition welcomed the new regulations, saying borrowers without escrow accounts are often surprised when property taxes and insurance are due and haven't budgeted for them. And borrowers can end up in default or foreclosure if abusive loan servicers don't correct er...