Last year, on January 10, 2014, extensive amendments by the Consumer Financial Protection Bureau Regulation X, which implements the Real Estate Settlement Procedures Act (“RESPA”) and Regulation Z, which implements the Truth in Lending Act (“TILA”), went into effect. Among the numerous new requirements imposed upon mortgage lenders and servicers were significant changes to written communications provided to consumers regarding their mortgages. The CFPB is now being urged by fair housing and civil rights groups to require that these communications be provided in multiple languages, a requirement that was not included in the 2014 amendments.
According to the United States Census Bureau, the Spanish-speaking population increased by 23.4 million people, or 211 percent, between 1980 and 2007. The National Council of La Raza estimates that, by the year 2020, Latinos will make up approximately half of all new home buyers. Eric Rodriguez, a top official at the NCLR, stated that, in order “[t]o ensure the highest quality and most transparent customer service for all future homeowners, servicers must begin to improve efforts to communicate effectively with all homeowners, regardless of their language.”
Providing communications in multiple languages will not be a simple task for lenders and servicers. Aside from identifying the communications to be provided in multiple languages, each communication must be translated and adjusted in each language, in order to ensure that the required disclosures are accurately and clearly provided. Software programs and computerized databases will need to be programmed to store each translation and match each customer to his or her preferred language. Even the smallest modifications will require extensive testing, training, and troubleshooting.
It remains to be seen whether the CFPB will require servicers to provide written communications in multiple languages and, if so, which languages. However, lenders and servicers should begin to consider the possibility now, in order to ensure that compliance and readiness can be accomplished in a timely manner.