On May 29, the Consumer Financial Protection Bureau announced a settlement with BSI Financial Services, a Texas-based mortgage servicer. Acting as a reminder to mortgage servicers of the importance of maintaining rigorous information management systems, the CFPB alleged BSI violated the Consumer Financial Protection Act of 2010, the Real Estate Settlement Procedures Act, and the Truth in Lending Act in part because of allegedly inadequate information management procedures. Specifically, the CFPB alleged BSI failed to:

  • Recognize that certain loans transferred to it had pending loss mitigation applications, in-process loan modifications, and permanent loan modifications due to onboarding the loans with incomplete or inaccurate loan information;
  • Ensure timely escrow disbursement due to onboarding loans with incomplete or inaccurate loan information;
  • Send consumers monthly statements containing accurate principal and interest payments due to the untimely entering of adjustable interest rate loan data into its servicing system;
  • Permit personnel or consumers to readily obtain accurate loan information due to an inadequate document management system; and
  • Ensure timely escrow disbursement of property taxes and homeowners’ insurance premiums due to inadequately overseeing the entry of loan escrow information by its service providers.

Because of the allegedly inadequate information management processes, the consent order requires BSI to “establish and maintain a comprehensive data integrity program reasonably designed to ensure the accuracy, integrity, and completeness of the data” for loans that it services. Furthermore, BSI “must implement an information technology plan appropriate to the nature, size, complexity, and scope” of its operations. The consent order requires BSI to pay a $200,000 civil penalty and no less than $36,500 in restitution.

Considering this recent consent order, mortgage servicers should review their policies and procedures to determine if they have adequate processes to verify the accuracy of loan information being onboarded. They should also verify that they have adequate procedures to maintain the information’s accuracy throughout the loan servicing lifecycle.