Someone inheriting an interest in a home may need mortgage information without already being personally liable for its debt. For this October 22, 2016 weekend review, the relevant developments are the CFPB documents published October 19 in the preceding week’s news, not a new Saturday announcement. They address how servicers recognize certain successors and communicate with them. [2016-18901][2016-18902]

The servicing rule defines a confirmed successor in interest through the servicer’s confirmation of identity and ownership interest. It extends specified Regulation X and Z protections to that status. The companion interpretation explains that assumption of the mortgage obligation is not necessarily required. Being a relative alone is not the test: the defined transfer category and confirmation matter. [2016-18901][2016-18902]

Part II.A of the interpretation addresses a particular obstacle. Communications with confirmed successors, in compliance with the specified servicing rules, do not violate the Fair Debt Collection Practices Act’s section 805(b) restriction on third-party communications. That is a narrow protection for compliant servicing, not permission to contact any family member or use abusive collection methods. Other debt-collection obligations remain. [2016-18901][2016-18902]

The main rule generally takes effect October 19, 2017, with specified exceptions, including successor provisions and bankruptcy periodic statements, on April 19, 2018. The companion’s successor interpretation also waits until April 19, 2018. Our public-interest reading is that access to information and liability for debt must not be casually conflated. The two CFPB documents form one policy chain, not independent proof that foreclosures were prevented. [2016-18901][2016-18902]

Source documents

  1. Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)https://www.govinfo.gov/content/pkg/FR-2016-10-19/html/2016-18901.htm
  2. Safe Harbors From Liability Under the Fair Debt Collection Practices Act for Certain Actions Taken in Compliance With Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)https://www.govinfo.gov/content/pkg/FR-2016-10-19/html/2016-18902.htm