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New CFPB Mortgage Servicing Rules (Part 1): Error Resolution; Force Placed Insurance;

Periodic Statements, and Other Servicer Duties John Rao 

Tara Twomey 

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New CFPB Servicing Regulations John Rao National Consumer Law Center

The Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Rulemaking authority over the two key federal statutes that apply to mortgage servicing, the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), was transferred to the CFPB. Following an extensive notice and comment period, the CFPB issued new mortgage servicing rules under these statutes affecting a wide variety of servicer duties.1 These regulations, incorporated into Regulation Z for TILA and Regulation X for RESPA, will become effective January 10, 2014. This article provides an overview of the new regulations, and a more detailed analysis of these provisions is provided in chapter 9 of NCLC’s Foreclosures (4th edit. and 2013 supp.). All of the servicer obligations discussed here are privately enforceable through the respective statute’s remedy provision.2 1. Periodic mortgage statements

Mortgage servicers, except for servicers of subprime mortgage loans, have typically provided consumers with either monthly statements or preprinted coupon books containing payment information. However, federal law has never required such statements or regulated their content. Even when servicers do provide monthly statements, they often stop providing them when the borrower is in default or in a bankruptcy proceeding, times when the information is potentially most needed.3 Information that would assist a borrower in discovering account errors and avoiding default, such as the assessment of fees or diversion of payments into suspense accounts, also generally has not been provided by servicers on monthly statements. An amendment to the Truth in Lending Act and related regulations, effective on January 10, 2014, change this by requiring that periodic statements be sent to borrowers on most residential mortgage loans.4

Periodic statements that are prepared under the new regulation will give homeowners

significant information about their mortgage accounts. The disclosures provided on the statements may also assist attorneys in determining whether an account is actually in default and whether a servicer has properly applied payments or improperly charged unauthorized fees. The regulation requires that the statements contain information in the following categories: amount due for the billing period, explanation of amount due on the account

1 78 Federal Register 10902 (Feb. 14, 2013)(TILA) and 78 Federal Register 10696 (Feb. 14, 2013)(RESPA). 2 12 U.S.C. § 2605(f)(RESPA) and 15 U.S.C. § 1640(a)(TILA) (both provisions permitting recovery of actual damages, statutory damages, costs and attorney’s fees). 3 See In re Monroy, 650 F.3d 1300 (9th Cir.2011)(approving local form plan language requiring secured creditors to continue sending periodic statements to debtors if they were provided pre-petition). 4 15 U.S.C. § 1638(f); Reg. Z, 12 C.F.R. § 1026.41 (effective Jan. 10, 2014).

including fees imposed, past payment breakdown, transaction activity, partial payment information, contact and account information, and delinquency information if applicable. Several of these categories include disclosure of a partial payment that is sent to a suspense or unapplied funds account.

If the consumer is more than forty-five days delinquent, the statement must include:

(i) date when the consumer became delinquent; (ii) notification of possible risks, such as foreclosure, and expenses, that may be incurred if the delinquency is not cured; (iii) account history for the previous six months or the period since the last time the account was current showing the amount remaining past due from each billing cycle; (iv) notice indicating any loss mitigation program to which the consumer has agreed, if applicable; (v) notice of whether the servicer has initiated foreclosure by making the first notice or filing required by state law; (vi) total payment amount needed to bring the account current; and (vii) either the CFPB list or the HUD list of homeownership counselors and counseling organizations and the HUD toll-free telephone number to obtain contact information for homeownership counselors or counseling organizations.

The regulation does not require that periodic statements be provided if the mortgage is

a fixed rate loan and the servicer gives the borrower a coupon book that contains information substantially similar to that required by the regulation. Even if this coupon book exclusion applies, if the borrower is more than forty-five days delinquent, the servicer must still provide the required delinquency information separately in writing, including an account history for the delinquency period.

Servicers are also not required to provide periodic statements to borrowers with

reverse mortgages, and timeshare plans. The regulation applies only to closed-end mortgage loans, so open-end home loans such as HELOCs are exempted from coverage of the regulation. In addition, mortgage loans that are serviced by small servicers (servicers that service 5,000 or fewer mortgage loans) and state housing finance agencies are exempt from the periodic statement requirements.

Industry commenters suggested that the periodic statement rule should not apply to

borrowers in bankruptcy because accounting issues related to the treatment of prepetition arrearages were problematic. The CFPB’s response was practical – complexity alone does not justify a complete exemption, but may warrant certain adjustments. In fact, it is the “complexities” of the bankruptcy scenario that “necessitate” the periodic statement information be provided to consumers.5 Applying a conflict analysis similar to that set out in Randolph v. IMBS, Inc.,6 the CFPB noted that while certain laws such as the Bankruptcy Code and the Fair Debt Collection Practices Act may prevent the collection of a debt, these laws do not prevent a servicer from sending a periodic statement that is tailored to the particular circumstances of the bankruptcy case. The final rule allows servicers to make changes to the statement as they believe are necessary when a borrower is in bankruptcy, so as to reflect the payment obligations of the debtor in the bankruptcy proceeding. The CFPB even provided a

5 See Section-by-Section Analysis, § 1026.41(d)(2), 78 Fed. Reg. 10966 (Feb. 14, 2013). 6 368 F.3d 726 (7th Cir. 2004).

sample message servicers may add to the statement to avoid conflict with the automatic stay and discharge injunction.7 2. Payment change notices Many of the borrowers caught up in the recent foreclosure crisis had adjustable rate mortgages (ARM). Often these loans included initial “teaser” interest rates set lower than market rates, and elaborate and incomprehensible payment option terms. Another type of loan made during this period, a “hybrid ARM,” has a fixed interest rate for an introductory period that resets to an adjustable interest rate at the end of a specified period. The Dodd-Frank Act sought to address a variety of problems related to these loans, including consumers’ misapprehension of the risks associated with the payment change features of these loans. The Act amended TILA to require that notice be provided six months before the initial rate reset on a hybrid, closed-end ARM, and gave the CFPB authority to adopt further disclosures for other ARM products.8 Under the final rule issued by the CFPB, a consumer with an ARM must be provided with a notice between 210 and 240 days before the first payment is due after the first rate adjustment.9 Notice also must be sent between 60 and 120 days before payment at a new amount is due when the payment change is caused by a rate adjustment. 3. Prompt crediting of payments Mortgage servicers are typically responsible for collecting and processing mortgage payments from borrowers. Servicers’ delays in processing payments can result in unwarranted late fees and unjustified claims of borrower default. Complaints about slow payment processing led the Federal Reserve Board in 2008 to promulgate a rule that requires mortgage servicers to credit payments to consumers’ accounts as of the date of receipt.10 The Dodd-Frank Act essentially codified the FRB rule,11 and the CFPB final regulation implements this provision of the Act.12

7 See Section-by-Section Analysis, § 1026.41(d)(2), 78 Fed. Reg. 10966, note 125 (Feb. 14, 2013) (“For example, servicers may include a statement such as: ‘To the extent your original obligation was discharged, or is subject to an automatic stay of bankruptcy under Title 11 of the United States Code, this statement is for compliance and/or informational purposes only and does not constitute an attempt to collect a debt or to impose personal liability for such obligation. However, Creditor retains rights under its security instrument, including the right to foreclose its lien.’”). 8 15 U.S.C. § 1638a. 9 Reg. Z, 12 C.F.R. § 1026.20(c), effective Jan. 10, 2014. 10 Reg. Z, 12 C.F.R. § 1026.36(c)(1)(i) [§ 226.36(c)(1)(i)]; 73 Fed. Reg. 44,522, 44,604 (July 30, 2008); see National Consumer Law Center, Truth In Lending § 9.4.3.2 (8th ed. 2012 and Supp.). 11 15 U.S.C. § 1639f, as amended by Pub. L. N. 111-203, § 1464, 124 Stat. 1376 (July 21, 2010). 12 Reg. Z, 12 C.F. R. § 1026.36(c)(1), effective Jan. 10, 2014.

A servicer must credit a “periodic payment” received from the borrower as of the date

of receipt, except when a delay in crediting the payment will not result in a charge to the borrower or negative credit reporting.13 A “periodic payment” is defined as the “amount sufficient to cover principal, interest, and escrow (if applicable) for a given billing cycle.”14 If a servicer receives a payment that is less than a full periodic payment, this partial payment may be held in a suspense account. However, suspense accounts may be used only if authorized by the contract and permitted by state law.15 Funds must be applied from the suspense account when the amount in suspense in equal to or greater than a periodic payment.16 If the servicer elects to hold funds in suspense rather than crediting the partial payment or returning it to the consumer, the servicer must disclose the amount of funds held in suspense on the periodic statement, if such a statement is required.17

Non-conforming payments are payments that have been accepted by the servicer and

are distinguished from partial payments that are placed in suspense, which are considered not to have been accepted.18 Any non-conforming payment must be credited within five days of receipt. The servicer may specify reasonable requirements for making payments in writing.19 Failure to comply with these written payment instructions may result in a non-conforming payment. 4. Payoff statements

The Dodd-Frank Act amended TILA to require that accurate payoff statements be

provided to consumers.20 For any loan secured by the consumer’s dwelling, the creditor, assignee or servicer must provide an accurate statement of the total outstanding balance required to pay the obligation in full if a request is made in writing by the consumer or someone acting on behalf of the consumer.21 The statement must provide the payoff amount as of a specified date. Subject to several limited exceptions, the payoff statement must be provided within a reasonable time, but no later than seven business days after receiving a written request from the consumer or the consumer’s agent.

13 Id. 14 Id. 15 Official Interpretations § 1026.36(c)(1)(ii)-1; 78 Fed. Reg. 10,902, 11,019 (Feb. 14, 2013). 16 Reg. Z, 12 C.F.R. § 1026.36(c)(1)(ii)(B) (effective Jan. 10, 2014); Official Interpretations § 1026.36(c)(1)(ii)-1(iii); 78 Fed. Reg. 10,902, 11,019 (Feb. 14, 2013). 17 Reg. Z, 12 C.F.R. §§ 1026.36(c)(1)(ii)(A), 1026.41(d)(3)(i), (ii) (effective Jan. 10, 2014); Official Interpretations § 1026.36(c)(1)(ii)-1(iii), 1026.41(d)(3)-1; 78 Fed. Reg. 10,902, 11,019-20 (Feb. 14, 2013). Servicers not required to send periodic statements are exempt from this provision. See 78 Fed. Reg. 10,902, 10,955 (Feb. 14, 2013). 18 See 78 Fed. Reg. 10,902, 10,956 (Feb. 14, 2013). 19 Official Interpretations § 1026.36(c)(1)(iii); 78 Fed. Reg. 10,902, 11,019 (Feb. 14, 2013). 20 15 U.S.C. § 1639g, as amended by Pub. L. No. 111-203, § 1464, 124 Stat. 1376 (July 21, 2010); see also National Consumer Law Center, Truth In Lending § 9.3.9.4 (8th ed. 2012). 21 Reg. Z, 12 C.F. R. § 1026.36(c)(3), effective Jan. 10, 2014.

The Dodd-Frank Act amendment provides that the requirement is applicable to all “home loans,” a term not defined by the Act that is presumably broader than “residential mortgage loans.”22 The final regulation implements the statutory language by providing that the requirement applies to any consumer credit transaction secured by a “consumer’s dwelling.”23 Thus, the rule applies to open-end, home-secured loans such as HELOCs. By not limiting application to mortgage loans on the consumer’s principal dwelling, the rule also covers loans secured by vacation homes.

The written request for a payoff statement may be sent by a person acting on behalf of

the consumer. However, the CFPB indicated in its analysis of the final rule that the seven-day response period does not begin until a request is received from a “verified party.”24 Thus, if a creditor, assignee or servicer must verify authorization that a third party is acting on behalf of the consumer, they will have seven days from when a verified request is received to provide the payoff statement.

The failure to provide an accurate payoff statement based on a TILA request is subject

to error resolution under RESPA (discussed below). If the borrower sends a notice of error disputing the accuracy of a payoff statement, the servicer must respond within seven business days, rather than the longer thirty day response period for other error notices.25 Servicers, however, need not treat a borrower’s request for payoff balances as a request for information under RESPA.26 If a servicer receives a request for information seeking a payoff statement that is labeled as a RESPA request, the servicer may ignore the requirements under Regulation X and instead handle the request under the Regulation Z requirements. One effect of this treatment is that there is no prohibition under federal law for charging the borrower a fee to provide a payoff statement. If the CFPB had permitted a RESPA request for information to be used to obtain a payoff statement, the rule prohibiting the charging of fees for responding to information requests would have applied.27 Numerous industry commenters stated that they needed more time than seven days to provide payoff statements for loans in delinquency status, foreclosure, or bankruptcy. The CFPB refused to create a blanket exemption but agreed that it may not be feasible in some situations for servicers to prepare the statement within seven days.28 The final rule thus provides that when a servicer is unable to provide a payoff statement within seven days because a loan is in bankruptcy or foreclosure, or because the loan is a reverse mortgage, or

22 See 15 U.S.C. § 1602(cc)(5), as amended by Dodd-Frank (defining “residential mortgage loan” to exclude open-end, home-secured credit). 23 12 C.F. R. § 1026.36(c)(3) (effective Jan. 10, 2014). 24 See 78 Fed. Reg. 10,957 (Feb. 14, 2013). 25 12 C.F.R. 1024.35(e)(3)(a) (effective Jan. 10, 2014). For a discussion of error notices under RESPA, see § 9.2.2, supra. 26 See 12 C.F.R. 1024.36(a) (effective Jan. 10, 2014). Prior to the effective date of these rules, a payoff statement may still be obtained using a qualified written request under RESPA. 27 See 12 C.F. R. § 1024.36(g) (effective Jan. 10, 2014); § 9.2.2.7, supra. 28 See Section-by-Section Analysis, § 1026. 36(c)(3), 78 Fed. Reg. 10957 (Feb. 14, 2013).

because of natural disasters, the payoff statement must be provided within a reasonable time.29 No definition of “reasonable time” is provided. Unlike many other servicing requirements, the CFPB did not include in the final rule an exemption for community banks, credit unions, and small servicers. Many states have enacted laws dealing with payoff statements. In issuing the final rule, the CFPB acknowledged that many of these state laws have longer or shorter timelines for compliance, allowing from three to twenty-one days.30 Consistent with general preemption guidelines in which a conflict analysis is applied, the CFPB concluded that there was no need for the final rule to preempt state law. Regulation Z sets the maximum time period for compliance, but does not prevent creditors, assignees, or servicers from complying with a state law that would require a payoff statement to be provided sooner than seven days. They can comply with both the state law and Regulation Z deadlines by providing the payoff statement within the shorter of the two deadlines. State laws that allow a longer time period also do not prohibit the creditor, assignee, or servicer from providing a payoff statement within seven business days, and so there is no direct conflict between state law and the Regulation Z requirement. 5. Force-placed insurance

In response to numerous problems with insurance obtained by a servicer when a borrower’s policy lapses or is canceled, Congress created in the Dodd-Frank Act new restrictions on “force-placed insurance” (FPI).31 In addition to implementing the Act’s notice requirements, a significant consumer protection was added by the CFPB to the final rule. Servicers are prohibited from obtaining FPI, and instead must pay the borrower’s existing insurance policy, if there is an escrow account on the mortgage.32 This duty to disburse funds from the escrow account to pay the borrower’s policy exists even if there are not sufficient funds in the account, except if the servicer has a reasonable basis to believe that the borrowers’ insurance is being canceled for reasons other than nonpayment or the property is vacant.33 The servicer may seek repayment from the borrower for any of its own funds that are advanced to pay the borrower’s policy.

The CFPB’s final rule also requires that before charging a borrower for FPI, the

servicer must send two notices to the borrower indicating that the servicer does not have evidence of hazard insurance coverage, specifying the procedures by which the borrower may demonstrate coverage, and advising the borrower that insurance may be force-placed if proof of coverage is not provided.34 The first notice must be sent at least 45 days before charging the borrower, and a second reminder notice must be sent no earlier than 30 days after the first

29 Reg. Z, 12 C.F. R. § 1026.36(c)(3), effective Jan. 10, 2014. 30 See 78 Fed. Reg. 10,957 (Feb. 14, 2013). 31 12 U.S.C. § 2605(l) and (m). 32 Reg. X, 12 CFR § 1024.17(k)(5), effective Jan. 10, 2014. 33 Reg. X, 12 CFR § 1024.17(k)(5)(ii), effective Jan. 10, 2014. 34 Reg. X, 12 CFR § 1024.37(c), effective Jan. 10, 2014.

notice and at least 15 days before charging the borrower. Servicers must terminate FPI coverage within 15 days of receiving evidence of coverage and any premiums charged for periods when both policies were in effect must be refunded.35 All charges related to FPI, other than charges subject to state regulation, must be for a service that was actually performed and have a reasonable relationship to the cost of providing the service.36 The force-placed insurance requirements do not apply to flood insurance.

The CFPB was asked during the rulemaking comment period to exempt from coverage

certain borrowers who might be “unresponsive” to the force-placed insurance notices, such as borrowers in bankruptcy, borrowers whom the servicer has referred to foreclosure, or borrowers who have made no payment for more than six months and the servicer has determined have vacated the property.37 The CFPB concluded that this would be inconsistent with the intent of Congress, and no bankruptcy, default or foreclosure exemptions were included in the final force-placed insurance rule.

A partial exemption has been provided to small servicers from the duty to disburse

funds from escrow to pay premiums on existing borrower insurance policies.38 Small servicers are exempted from this requirement only if any force-placed insurance that is purchased by the small servicer and charged to the borrower is less than the amount the small servicer would need to disburse out of the borrower’s escrow account to ensure that the borrower’s hazard insurance premium charges were paid in a timely manner. In other words, if repayment by the borrower of the charges for force-placed insurance obtained by the small servicer would be less costly than repayment by the borrower of the funds needed to be advanced by the servicer to maintain the borrower’s insurance, the small servicer can force place insurance. Small servicers are required to comply the notice requirements. 6. Request for Information and Notice of Error

In 1990, Congress amended RESPA to create a mechanism for borrowers to obtain answers from loan servicers to questions they have about their accounts and to obtain corrections to their accounts where appropriate.39 When a borrower has a question or dispute concerning an account, a written inquiry triggers certain obligations on the part of the servicer as long as the borrower includes identifying information and a statement of the reasons why the account is in error or clear information about the borrower’s question. This inquiry is referred to in RESPA as a “qualified written request.” However, RESPA regulations effective on January 10, 2014 will now refer to these written inquiries as a “request for information”

35 Reg. X, 12 CFR § 1024.37(g), effective Jan. 10, 2014. 36 Reg. X, 12 CFR § 1024.37(h), effective Jan. 10, 2014. 37 See Section-by-Section Analysis, § 1024. 37(c)(1), 78 Fed. Reg. 10767 (Feb. 14, 2013). 38 This provision uses the definition of small servicer provided in Regulation Z. A small servicer is a servicer that either (1) services less than 5000 mortgage loans and these mortgage loans are all owned or originated by the servicer or an affiliate or (2) is a Housing Finance Agency, as defined in 24 C.F.R. 266.5. See 12 C.F.R. § 1026.41(e)(4). See also § 9.1.4.2, supra. 39 12 U.S.C. [section symbol] 2605(f).

and a “notice of error.”40 Although there are separate procedures that apply to each of these forms of written inquiry, both a notice of error and a request for information can be combined in the same letter. A far more extensive discussion of the existing qualified written request requirements, and the new notice of error and a request for information requirements, is provided in chapter 9 of NCLC’s Foreclosures (4th edit. and 2013 supp.).

Effective in 2014, a servicer must acknowledge a request for information or notice of

error within five business days of receipt. Within thirty business days of receipt, the servicer must conduct a reasonable investigation if the borrower claims an error; provide the information requested, if available; make any necessary correction to the account; and, inform the consumer of its actions. A servicer may extend the thirty-day period for responding by an additional fifteen business days if the servicer notifies the borrower in writing of the extension before the end of the thirty-day period. During the sixty-day period after a notice of error has been sent, the servicer cannot give any information to a credit reporting agency if a payment related to the inquiry is overdue.41 There is a different response timeline for a request for information that seeks the identity, address or other relevant contact information for the owner or assignee of a mortgage loan. A servicer is required to respond to such a request within ten business days of receipt.42 When the CFPB initially proposed the error resolution rule, it contained an exclusive list of covered errors.43 The list of specific covered errors did not include a general category for errors related to the servicing of the borrower’s loan. However, the CFPB added to the final rule, in addition to ten specific covered errors, a catch-all category for “any other error relating to the servicing of a borrower’s mortgage loan.”44

The Dodd-Frank Act amended RESPA to clarify that a servicer shall not charge a fee for responding to a “valid qualified written request.”45 This provision has been implemented by Regulation X for notices of error and requests for information.46 A servicer is prohibited from charging a fee, or requiring a borrower to make any payment that may be owed on a borrower’s account, as a condition of responding to a notice of error or request for information. As under the previous HUD regulations, the CFPB did not include any default or bankruptcy exemptions from compliance with the request for information or notice of error requirements. 7. Early intervention and continuity of contact requirements

40 Reg. X, 12 C.F.R. § 1024.35 and § 1024.36 (effective Jan. 10, 2014). 41 12 U.S.C. [section symbol] 2605(e); Reg. X, 12 C.F.R. [section symbol] 1024.35(i). 42 Reg. X, 12 C.F.R. § 1024.36(d)(2)(i)(A) (effective Jan. 10, 2014). 43 See Section-by-Section Analysis, § 1024.35(b)(11), 78 Fed. Reg. 10,743/-/44 (Feb. 14, 2013). 44 Reg. X, 12 C.F.R. § 1024.35(b)(11) (effective Jan. 10, 2014). 45 Pub. L. No. 111-203, 124 Stat. 1376, tit. XIV, § 1463(a) (July 21, 2010). 46 Reg. X, 12 C.F.R. § 1024.35(h) and § 1024.36(g) (effective Jan. 10, 2014).

The early intervention regulation requires a servicer to provide a borrower by the 45th

day of delinquency a written notice containing information about available loss mitigation options.47 If the borrower responds and seeks loss mitigation assistance, the servicer is to maintain for the borrower a “continuity of contact” with the servicer.48 Servicers are required to have procedures to ensure that personnel are assigned to a delinquent borrower, and that these personnel are accessible by phone to assist the borrower with loss mitigation options.49 The personnel should be able to advise the borrower on the status of any loss mitigation application and applicable timelines, and be able to retrieve all written information provided by the borrower on the application and a complete record of the borrower’s payment history.50 A servicer is given discretion to determine whether to assign a single person or a team of personnel to respond to a delinquent borrower.51

Regulation X section 1024.39(c) provides that nothing in the regulation requires a servicer to communicate with a borrower in a manner otherwise prohibited by applicable law. The Commentary for this provision clarifies that a servicer is not required to communicate with a borrower in a manner “inconsistent with applicable bankruptcy law or a court order in a bankruptcy case,” and that the requirements may be adapted in any manner that would permit information to be provided to borrowers about loss mitigation options to the extent permitted by bankruptcy law or court order.52 The CFPB noted that by adding the Commentary, it was not intending to interpret the Bankruptcy Code, but simply indicating that servicers should have flexibility in complying with the rule and bankruptcy law.53

The Commentary to Regulation X further explains that if the continuity of contact

requirement would otherwise apply to a borrower who has filed bankruptcy, a servicer may assign personnel with specialized knowledge in bankruptcy law to assist the borrower.54 A servicer is given discretion to assign a single person or a team of personnel, and they may be “single-purpose or multi-purpose personnel.”55 Thus, the rule may be complied with even if a

47 12 CFR § 1024.39(b), effective Jan. 10, 2014. 48 Reg. X, 12 C.F.R. § 1024.40, effective Jan. 10, 2014. 49 Reg. X, 12 C.F.R. § 1024.40(a), effective Jan. 10, 2014. 50 Reg. X, 12 C.F.R. § 1024.40(b), effective Jan. 10, 2014. 51 See Official Bureau Interpretation, Supplement 1 to Part 1024, ¶ 40(a)–2, effective Jan. 10, 2014. 52 See Official Bureau Interpretation, Supplement 1 to Part 1024, ¶ 39(c)-1, effective Jan. 10, 2014. 53 See Section-by-Section Analysis, § 1024.39(b), 78 Fed. Reg. 10807 (Feb. 14, 2013). 54 See Official Bureau Interpretation, Supplement 1 to Part 1024, ¶ 40(a)–2, effective Jan. 10, 2014. 55 Id. (“Single-purpose personnel are personnel whose primary responsibility is to respond to a delinquent borrower’s inquiries, and as applicable, assist the borrower with available loss mitigation options. Multi-purpose personnel can be personnel that do not have a primary responsibility at all, or personnel for whom responding to a delinquent borrower’s inquiries, and as applicable, assisting the borrower with available loss mitigation options is not the personnel’s primary responsibility.”).

servicer transfers the borrower’s file to a separate bankruptcy unit with personnel who are not part of the servicer’s loss mitigation unit or to outside bankruptcy counsel.56

8. Loss mitigation procedures

As part of the CFPB’s broad grant of authority to carry out the consumer protection

purposes of RESPA and to implement foreclosure avoidance strategies, the final rule contains a number of procedural requirements related to loss mitigation.57 The CFPB was careful to note that it is not requiring mortgage creditors to offer loan modifications or any particular loss mitigation program. Rather, the rules are designed to compel proper access by borrowers to such programs when they exist. The requirements apply only to a mortgage loan that is secured by a property that is the debtor’s principal residence.58 In general, servicers generally must identify and provide accurate information on all options the borrower may be eligible for, provide prompt access to documents, identify and notify borrower of documents needed to complete an application, and evaluate the borrower for all available loss mitigation options once a complete application is received.59

Section 1024.41(b)(2) imposes distinct obligations upon a servicer to respond to an

incomplete application.60 These obligations extend over the post-default period up to forty-five days before a scheduled foreclosure sale date.61 Upon receipt of any communication that can reasonably be deemed to be an application for loss mitigation, the servicer must promptly conduct a review to determine whether the communication represents a complete or an incomplete application.62 If the servicer deems the application to be “incomplete” for any reason, the servicer must act affirmatively to complete the application. The servicer must exercise “reasonable diligence” to obtain any documents and information it claims to require to complete the application.63 Second, the servicer must provide a written notice to the borrower describing the documents and information needed to complete the application.64 The servicer must send the notice within five business days of receipt of an application it deems incomplete.65

56 See Section-by-Section Analysis, § 1024.39(b), 78 Fed. Reg. 10811 (Feb. 14, 2013). 57 The CFPB relied on its authority under sections 6(j)(3), 6(k)(1)(C), 6(k)(1)(E) and 19(a) of RESPA to establish the loss mitigation procedures in § 1024.41. The CFPB also relied upon the general rulemaking authority under § 1022(b) of the Dodd-Frank Act to carry out the consumer protection purposes of RESPA. See Section-by-Section Analysis, § 1024.41, 78 Fed. Reg. 10822 (Feb. 14, 2013). 58 Reg. X, 12 CFR § 1024.30(c)(2), effective Jan. 10, 2014. 59 Reg. X, 12 CFR § 1024.41, effective Jan. 10, 2014. 60 Reg. X, 12 C.F.R. § 1024.41(b)(2) (effective Jan. 10, 2014). 61 Reg. X, 12 C.F.R. § 1024.41(b)(2)(i) (effective Jan. 10, 2014). 62 Reg. X, 12 C.F.R. § 1024.41(b)(2)(i)(A) (effective Jan. 10, 2014). 63 Reg. X, 12 C.F.R. § 1024.41(b)(1) (effective Jan. 10, 2014). 64 Reg. X, 12 C.F.R. § 1024.41(b)(2)(i)(B) (effective Jan. 10, 2014). 65 Reg. X, 12 C.F.R. § 1024.41(b)(2)(i)(B) (effective Jan. 10, 2014).

Significantly greater rights accrue to a borrower whose submission constitutes a “complete” loss mitigation application. If the servicer receives an application its deems complete, it must acknowledge the application as “complete” by sending the borrower written notice within the five-day period.66 A “complete loss mitigation application” is defined as “an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower.”67

In addition to acknowledging the application as “complete,” the servicer’s immediate

responsibility is to evaluate it. Section 1024.41(c)(1)(i) sets a strict time frame for this evaluation provided that the complete application is received by the servicer more than thirty-seven days before a foreclosure sale.68 The evaluation of the borrower for all loss mitigation options must be completed within thirty days of receipt of a complete application.69 By this time deadline the servicer is also required to provide the borrower with a written notice stating the servicer’s determination of which loss mitigation options, if any, are being offered to the borrower.70

If the servicer is denying any loan modification options, the notice must state specific

reasons for the denial of each modification option.71 If the reason for denial was a requirement set by an owner or assignee of the loan, the notice must identify the owner or assignee and the specific requirement that was the basis for the denial.72 A mere statement that a loan modification option is denied based on an investor requirement, without additional information specifically identifying the relevant investor or guarantor and the specific applicable requirement, is insufficient.73 If the servicer denies any loan modification option because of a net present value calculation,74 the notice must state this reason and include the inputs used for the calculation.75 The denial notice must also describe the borrower’s right to appeal the denial, the deadline to make an appeal, and any requirements for making an appeal.76 Borrowers may generally exercise appeal rights so long as the complete application was submitted at least ninety days before a scheduled foreclosure sale.77

66 Reg. X, 12 C.F.R. § 1024.41(b)(2)(i)(B) (effective Jan. 10, 2014). 67 Reg. X, 12 C.F.R. § 1024.41(b)(1) (effective Jan. 10, 2014). 68 Reg. X, 12 C.F.R. § 1024.41(c)(1)(i) (effective Jan. 10, 2014). 69 Reg. X, 12 C.F.R. § 1024.41(c)(1)(i) (effective Jan. 10, 2014). 70 Reg. X, 12 C.F.R. § 1024.41(c)(1)(ii) (effective Jan. 10, 2014). 71 Reg. X, 12 C.F.R. § 1024.41(d) (effective Jan. 10, 2014). 72 See Official Bureau Interpretation, Supplement 1 to Part 1024, ¶ 41(d)(1)-1 (effective Jan. 10, 2014). 73 Id. 74 See § 2.8.2.3, supra (discussing generally the net present value test). 75 See Official Bureau Interpretation, Supplement 1 to Part 1024, ¶ 41(d)(1)-2 (effective Jan. 10, 2014). 76 Reg. X, 12 C.F.R. § 1024.41(d)(2) (effective Jan. 10, 2014). 77 Reg. X, 12 C.F.R. § 1024.41(h)(1) (effective Jan. 10, 2014). See also § 9.2.8.5, infra.

Regulation X’s loss mitigation rule limits mortgage servicers’ “dual tracking” practices. Dual tracking refers to a common servicer practice of proceeding with foreclosure while evaluating a borrower for loss mitigation options. The CFPB’s rules apply restrictions to dual tracking during two distinct stages. During the initial 120 days of a delinquency, a borrower should be insulated from foreclosure activity.78 Servicers are prohibited from taking the first step to initiate foreclosure proceedings under state law during this time period.79 This regulation preempts state foreclosure timelines to the extent that they allow an earlier commencement of foreclosure. 80 The “first notice” includes “a foreclosure complaint, a notice of default, a notice of election or demand, or any other notice that is required by applicable law in order to pursue acceleration of a mortgage loan obligation or sale of a property securing a mortgage loan obligation.”81

The final regulation also requires the servicer to stop the foreclosure process in certain situations, depending upon when a complete loss mitigation application is received.82 If a borrower who has never had a complete loss mitigation application evaluated submits a complete application thirty-seven days or more before a scheduled foreclosure sale, the servicer must not conduct a sale or move for a foreclosure judgment or order of sale until the application has been evaluated and notice of decision given.83

78 See Section-by-Section Analysis, § 1024.41(f), 78 Fed. Reg. 10,833 (Feb. 14, 2013) (“The Bureau further believes it necessary and appropriate for borrowers, servicers, and courts to have a known early period during which a servicer shall not begin the foreclosure process.”). 79 Reg. X, 12 C.F.R. § 1024.41(f)(1) (effective Jan. 10, 2014). 80 See Section-by-Section Analysis, § 1024.41(f), 78 Fed. Reg. 10,833 (Feb. 14, 2013) (“The Bureau understands and intends that any such requirement will preempt State laws to the extent such laws permit filing of foreclosure actions earlier than after the 120th day of delinquency.”). 81 Id. 82 Reg. X, 12 CFR §§ 1024.41(f)(2) and (g), effective Jan. 10, 2014. 83 Reg. X, 12 C.F.R. § 1024.41(g) (effective Jan. 10, 2014).

©National Consumer Law Center 2013

New CFPB Mortgage Servicing Rules (Part 1)

Consumer Rights Litigation ConferenceJohn Rao

Tara Twomey

Servicers’ Duties under RESPA• Provide Requested Information and Correct

Account Errors

• Provide Servicing Transfer Notices

• Comply with Force-Placed Insurance Procedures

• Maintain Escrow Accounts

• Comply with Loss Mitigation Procedures

What is a Qualified Written Request?

QWR under RESPA § 2605(e) must include:

• borrower’s name and account (or sufficient information to enable servicer to identify borrower and account); and

• “reasons for the belief of the borrower, to the extent applicable, that the account is in error,” or

• “sufficient detail to the servicer regarding other information sought by the borrower”– “other information” must be “information related to the

servicing of the loan”

CFPB Final Rule – Jan. 10, 2014

• New regime: separate qualifications and procedures for:

– “notice of error” under Reg. X § 1024.35

– “request for information” under Reg. X § 1024.36

• Written inquiry can be a NOE or RFI even if not a QWR

What is a QWR, NOE and RFI? What is a QWR, NOE and RFI?

Notice of Error• “Error” must fall within one of ten listed

categories, plus– catchall category for “any other error related to the

servicing of borrower’s mortgage loan”

• Most covered errors relate to duties imposed on servicers by RESPA– includes failing to transfer accurate and timely

information about borrower’s mortgage account to a transferee servicer

• Two covered errors deal with dual tracking

Notice of Error• Can a borrower assert under catch-all a

servicer’s failure to correctly evaluate borrower for a loss mitigation option?

– Reg. X changes clearly make loss mitigation related to servicing of loan

– CFPB said it did not add this as specific covered error because appeal process in § 1024.41(h) should provide effective review

– but CFPB also noted that catch-all was added “to encompass the myriad and diverse types of errors that borrowers may encounter….”

– loss mitigation evaluation was not excluded as a “noncovered error”

Request for Information• Servicer is required to respond to any written

request for information “with respect to the borrower’s mortgage loan”

• Unlike QWR, a RFI is not limited to information “related to the servicing” of the loan

• RFI may seek:– information about a loan modification application – “servicing file”

Limitations on NOE and RFI• Servicer is not required to comply with a

NOE that it reasonably determines is duplicative or overbroad

• Servicer is not required to comply with a RFI that it reasonably determines is duplicative, confidential, overbroad, or unduly burdensome

• Servicer must notify borrower in writing of basis for determination within 5 business days after making determination

Who Can Send a NOE and RFI?

• Borrower

• Borrower’s Attorney

• Borrower’s “Agent”

– CFPB Commentary: Servicer may require proof of authority from agent and may not treat letter as notice of error or information request until documentation received

Where to Send a NOE and RFI?

• Servicer’s designated address– Reg. X, 12 C.F.R. § 1024.35(c) and 1024.36(b)– must provide written notice that exclusive address– if designated, must have same address for notices of

error and information requests– must post designated address on website if website

lists contact address for servicer

• Do not send to lock box address

• Do not send (solely) to servicer’s attorney

When to Send a NOE and RFI?

• To former servicer:– for inquiry not related to escrow accounts

• up to one year from the date of transfer of servicing from servicer receiving request to new servicer, or

• up to one year from the date loan balance is paid in full

– for inquiry related to escrow account• up to five years from transfer or date loan is paid

in full (changed to one year after Jan. 10, 2014)

• To current servicer – any time

Servicer Obligations

• 5 business days (20 days before Jan. 10, 2014)– acknowledge QWR, error notice or information

request, or– take requested action

• 30 business days (60 days before Jan. 10, 2014)– correct borrower’s account, or– after conducting a reasonable investigation, provide

borrower written explanation as to why servicer believes account is correct, or

– provide borrower with requested information or explanation why information is unavailable.

Servicer Obligations

• Exceptions to 30-day response period (effective Jan. 10, 2014)

– 7 business days for notice of error asserting failure to provide accurate payoff statement

– prior to foreclosure sale or 30 business days after receipt of notice of error, whichever is earlier, for notice of error based on 120-day pre-foreclosure waiting period or dual-track requirements

– 10 business days for request for information seeking identity of owner of mortgage

Servicer Obligations

• Extension of 30-day response period

– additional 15 day extension to respond permitted if servicer notifies borrower of extension and reason for delay before end of initial 30-day period.

– But no extension permitted for • notice of error based on 120-day pre-foreclosure waiting

period or dual-track requirements, and• request for information seeking identity of mortgage

owner

Servicer Obligations• During the response period:

– No adverse credit reporting of payment that is subject of notice of error, for 60 days after receipt of notice. §2605(e)(3)

– But servicer may pursue collection remedies, including foreclosure.

• Except for notice of error based on 120-day pre-foreclosure waiting period or dual-track requirements, provided that notice is received more than 7 days before foreclosure sale. Reg. X, §1024.35(i)

Servicer Limited Safe Harbor

• No liability, if:

– Servicer corrects error within 60 days of discovery, but before

• Action filed under § 2605(f)

• Receipt of written notice of error from borrower

• Unintentional mistakes are actionable

• No bankruptcy or litigation “exemption”

Identity of Mortgage Loan Owner

– Servicer must respond within 10 business days to request for identity, address, and other contact information about owner or assignee of loan

– Supplements TILA § 1641(f), but provides time deadline

– Final rule treats as request for information but provides 10 day rather than 30 day response time limit – Reg. X § 1024.36(d)(2)

Servicer Fees for Responding to QWR

• Arguments for requests made before Jan. 10, 2014:– No express provision in RESPA (pre-Dodd-Frank)– Not authorized by contract (default or legal

proceeding, and reasonable and appropriate?)– Against remedial purpose of RESPA and public

policy

• Dodd-Frank amendment prohibiting fees added to Reg. X– § 1024.35(h) – error resolution– § 1024.36(g) – information requests

Force-Placed Insurance (Jan. 10, 2014)

• Before charging for force-placed insurance, servicer must

– reasonably believe borrower failed to comply with contract requirement to maintain insurance

– send two notices to borrower requesting proof of insurance

• first notice at least 45 days before charging borrower

• second notice no earlier than 30 days after first notice and at least 15 days before charging borrower

• Servicer must terminate force-placed insurance within 15 days after receiving proof of coverage and refund premiums for period when both policies in effect

Force-Placed Insurance (Jan. 10, 2014)

• Final rule requires servicer to pay the borrower’s existing insurance policy, if there is an escrow account, except if servicer has reasonable basis to believe– that the borrower’s insurance is being canceled for

reasons other than nonpayment, or– the property is vacant.

• FPI charges must be for services actually performed and have reasonable relationship to cost of providing the service

• Amends RESPA § 2605, so private remedy

Transfer of Servicing Rights

Disclosure at application:

• Lender must disclose within three business days of loan application

– Whether servicing of loan may be assigned, sold or transferred at any time during the term of the loan.

– Statement of borrower’s rights under § 2605(e) to dispute and obtain information (no longer required after Jan. 10, 2014).

Transfer of Servicing Rights

All other transfers of servicing:

– Former servicer (transferor) must notify borrower in writing 15 days before effective date of transfer

– New servicer (transferee) must provide identical notice to borrower not more than 15 days after effective date of transfer

– Notices may be combined if sent no later than 15 days before the effective date of transfer

Notice of Transfer

Effective Date of Transfer

15 Days 15 Days

Former ServicerAt least 15 days

before effective date of transfer

New ServicerNo more than15 days

after effective date of transfer

Content of Transfer Notice

• effective date of transfer;

• name, address, and toll-free or collect call telephone number of transferee servicer;

• toll-free or collect call telephone number for servicing transfer inquiries;

• date old servicer will stop accepting loan payments and date new servicer will begin accepting the payments;

• any information concerning the effect, if any, that transfer may have upon the terms of mortgage life, disability or other type of optional insurance;

• what action, if any, the consumer must take to maintain insurance coverage

Payment Safe Harbor

• If consumer sends payment to former servicer during sixty-day period after effective date of transfer and it is received before the due date:

– Late fee cannot be imposed

– Payment cannot be treated as late for any other purposes

• Reg. X now provides that former servicer can send payment to new servicer or return it to the borrower

Duty to Make Timely Escrow Disbursements

• “Timely” disbursements out of escrow required – 12 U.S.C. § 2605(g)

• “Timely” means made on or before deadline to avoid penalty - Reg. X, § 1024.17(k)(1)

• Special rule for taxes• Servicer must advance funds to make timely

disbursements as long as borrower’s payments are not more than 30 days overdue, – except duty to disburse applies for hazard

insurance even if borrower payments are overdue - Reg. X, § 1024.17(k)(5)

Early Intervention

• No later than 36th day of delinquency, servicer must make good faith effort to establish “live contact” with the borrower

– includes telephoning or conducting in-person meeting with the borrower, but not leaving a recorded phone message

– purpose is to provide opportunity to discuss the circumstances of a borrower’s delinquency

– servicer should inform the borrower about availability of loss mitigation options, if appropriate

Early Intervention• No later than 45th day of delinquency, servicer

must provide borrower with written notice containing information about available loss mitigation options

– must also give telephone number for “continuity of contact” personnel and information on how to contact approved housing counselors

– servicer is not required to give this notice more than once during any 180-day period

– rule does not require communication prohibited by applicable law

Loss Mitigation Procedures• If servicer receives loss mitigation application 45

days or more before foreclosure sale, servicer must:

– promptly review to determine if complete;

– notify borrower in writing within 5 business days stating:

• whether application is complete;

• any additional documents needed if determined to be incomplete; and

• date by which borrower must submit additional documents

Loss Mitigation Procedures• If servicer receives complete loss mitigation

application more than 37 days before foreclosure sale, servicer must within 30 days of receipt:

– Evaluate borrower for all loss mitigation options available to the borrower

– provide borrower with written notice of decision

– If denial of loan mod., written notice shall include specific reasons for the servicer’s decision for each option available to the borrower, and information about appeal rights

• Complete loss mitigation application means all information the servicer requires from a borrower in evaluating applications for the options available to the borrower

Dual-Tracking Provisions• Servicers must not make first notice or filing

required for foreclosure process until mortgage loan is more than 120 days delinquent

• If borrower submits complete application during 120-day period or before servicer has made first notice or filing, a servicer shall not make first notice or filing to initiate the foreclosure process

• This provision (§1024.41(f)(1)) preempts state foreclosure timelines to the extent they allow an earlier commencement of foreclosure

Dual-Tracking Provisions• If borrower submits complete application after first notice or

filing but more than 37 days before a foreclosure sale, servicer may proceed with foreclosure process, but shall not move for foreclosure judgment or order of sale, or conduct sale, until decision given or borrower rejects offer or fails to perform

• Prohibition includes making a dispositive motion, such as motion for default judgment, judgment on pleadings, or summary judgment, which may directly result in a foreclosure judgment or order of sale

• If such a motion has been made before receiving a complete application, servicer must take reasonable steps to avoid a ruling or issuance of an order

RESPA Remedies

• Actual Damages, Costs and Attorney’s Fees– Must plead actual damages to avoid 12(b)(6) dismissal

– Includes emotional distress damages

• Statutory Damages– Up to $2,000 per violation if “pattern or practice of

noncompliance”

– Capped in class actions at $1 mil. or 1% of servicer net worth, whichever is less

Servicers’ Duties under TILA

• Promptly Credit Payments

• Provide Periodic Mortgage Statements

• Provide Payment Change Notices

• Provide Payoff Statements

• Provide Transfer of Ownership Notices

Prompt Crediting of Payments• Servicer must credit “periodic payment” upon

receipt, unless:– no charge to consumer and– no negative credit reporting; or– borrower doesn’t follow instructions about how to pay

• “Periodic payment” – defined as amount sufficient to cover principal, interest, and escrow for billing cycle

• No pyramiding of late fees - same as FTC Credit Practices Rule

Prompt Crediting of Payments• Partial payments may be placed into a suspense

account and not treated as accepted– suspense account may be used only if authorized by

contract and permitted by state law– when funds held in suspense account are equal to or

greater than a periodic payment, they must be applied – must disclose on periodic statement, if provided

• Non-conforming payments (do not comply with payment instructions) are treated as accepted and must be credited within 5 days of receipt

• No small servicer or bankruptcy exemption

Periodic Statements• Servicer must send statement for each billing cycle with

the following categories of information:– amount due for the billing period

– explanation of amount due including fees imposed

– past payment breakdown

– transaction activity

– partial payment information

– contact and account information, and

– delinquency information, if applicable

• Disclosure required of payments servicer decides to hold in suspense account rather than apply to account

Periodic Statements• Delinquency information: If consumer is more than 45

days delinquent, statement must include: – date consumer became delinquent;

– notification of possible risks, such as foreclosure, and expenses, if delinquency is not cured;

– account history for previous six months or period since last time account was current showing the amount remaining past due from each billing cycle;

– notice of any loss mitigation program to which the consumer has agreed;

– notice of whether the servicer has initiated foreclosure by making the first notice or filing required by state law;

– total payment amount needed to bring the account current; and

– either the CFPB list or the HUD list of homeownership counseling organizations and the HUD toll-free telephone number

Periodic Statements

• Exemptions from coverage: – fixed rate mortgages if substantially similar information

provided on coupon book• But if borrower is more than 45 days delinquent,

servicer must provide delinquency information separately in writing, including an account history for the delinquency period

– mortgage loans that are serviced by small servicers (servicers that service 5,000 or fewer mortgage loans of which servicer or affiliate is creditor or assignee) and state housing finance agencies

– reverse mortgages and timeshare plans– open-end home loans such as HELOCs

Periodic Statements• No bankruptcy exemption – CFPB found that

“complexities” of bankruptcy scenario “necessitate” that periodic statement information be provided – rule allows servicers to make changes to statement, so

as to reflect payment obligations of the debtor in bankruptcy

• No default exemption – regulation is silent on when requirement terminates– servicers may argue statements required only when

payment is due for a billing cycle – but regulation contemplates that statement provided

even if borrower more than 45 days delinquent

Payment Change Notices• For ARMs, notice must be provided between 210

and 240 days before first payment is due after first rate adjustment

• Notice also must be sent between 60 and 120 days before payment at new amount is due when payment change is caused by a rate adjustment

• CFPB found no conflict with 21 day payment change notice requirement in Bankr. Rule 3002.1(b)– sending TILA notice earlier than required under

bankruptcy law “enhances consumer protection by providing these consumers with additional time to adjust to an increase in their mortgage payments.”

Payoff Statements – TILA Request

• Payoff statements must be sent within 7 business days after written request received

• Reg. X 1024.36(a) - servicers need not treat request for payoff balances as RESPA request for information– RESPA ban on servicer fees for response to

information requests does not apply

• Failure to provide accurate payoff statement based on a TILA request is subject to error resolution under RESPA

Payoff Statements – TILA Request• Rule applies to all loans secured by a

consumer’s dwelling, including open-end loans (HELOCs) and reverse mortgages

• CFPB refused to create a blanket exemption for loans in default, foreclosure, or bankruptcy.– if servicer is unable to provide a payoff statement

within 7 days because loan is in bankruptcy or foreclosure, or loan is a reverse mortgage, or because of natural disasters, payoff statement must be provided within a “reasonable time,” which is not defined.

Transfer of Ownership Notices

• Applies to “covered person” (not “creditor”), which is person acquiring legal title to the debt obligation– applies even if only partial interest acquired (must be

single disclosure if multiple parties)– applies even if ownership is transferred to a different

legal entity based on a merger– does not apply to person who acquires mortgage and

then transfers it within 30 days (this exception makes it difficult to determine chain of title)

– exception for servicer if legal title to loan is assigned to the servicer “solely for the administrative convenience of the servicer in servicing the obligation”

Transfer of Ownership Notices

• Notice to be given to “primarily liable” consumer

• Timing of disclosure

– no later than 30 days after mortgage loan transferred

– can be either acquisition date recognized by transferee or date recognized on books by transferror

Transfer of Ownership Notices

Content of Required Disclosure:

• Loan identity

• Identity, address, and telephone number of covered person

• Acquisition date

• Agent’s contact information

• Recording location

TILA Private Remedy

• Failure to comply with TILA servicing requirements gives rise to action under §1640 for actual and statutory damages, costs, and attorneys fees

• TILA § 1640 refers to “creditor”, which is typically the loan originator

• TILA § 1641(g) expands TILA normal meaning of creditor by referring to “the creditor that is the new owner or assignee of the debt”

TILA Remedies

• Actual Damages, Costs and Attorney’s Fees

• Statutory Damages: twice the finance charge, up to $4,000 for closed-end mortgage violations, effective July 30, 2009– Statutory damages are not available for violations

involving the periodic statement requirement

The nonprofit National Consumer Law Center® (NCLC®) helps build family wealth for low-income and other disadvantaged people in the U.S. by offering advocacy expertise through publications, policy analysis, research, litigation services, and training. www.nclc.org