The federal government proposed new rules on Tuesday that will give homeowners more ways to avoid foreclosure and get an accurate accounting of their monthly mortgage payments.
Congress mandated changes in the rules covering the mortgage servicing industry in the wake of the 2008 financial crisis.
The Consumer Financial Protection Bureau's proposed rules would require mortgage servicers to give all borrowers standardized monthly statements and warn borrowers about interest rate or insurance change.
The mortgage servicers would also be required to make "good-faith efforts" to contact borrowers at risk of foreclosure and give them options to avoid losing their homes. There are also stipulations for improving record-keeping and providing foreclosure counseling to those who need it.
The agency said it will formally propose the rules this summer and finalize them by January 2013.
"By fixing these root causes of mortgage servicing problems - and securing transparency and accountability for borrowers - consumers would have clearer information about their options to keep their homes and would be in a better position to hold servicers accountable for their decisions," Richard Cordray, the agency's director, said during a speech in Washington on Tuesday.
