The mortgage finance system in the United States is under radical reconstruction as a result of the events of 2007-2009. The Dodd-Frank Act (Dodd-Frank) impacts mortgage origination, servicing and securitization through a wide range of new requirements. It creates ability to repay requirements, risk retention requirements and mortgage origina-tion compensation restrictions, among other things. At the same time, federal and state regulators have been reformatting the mortgage servicing business through enforcement proceedings in addition to instituting notice and comment rulemaking proceedings. Still unaddressed is the future of Fannie Mae, Freddie Mac and federal support of affordable housing finance.

Reminiscent of the activism of the 1970s when our current federal consumer protection laws were first established, the Consumer Financial Protection Bureau (CFPB) has issued two proposed rules under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) to comprehensively modify the practices of residential mortgage servicers. The proposals would impact how servicers (i) credit borrowers for their mortgage payments; (ii) notify borrowers of changes in the status of their mortgages; (iii) respond to borrower inquiries; and (iv) provide early intervention and loss mitigation programs to delinquent borrowers.