Washington, D.C. — New rules aimed at protecting homeowners from unexpected costs and shoddy service have been proposed by the Consumer Financial Protection Bureau.
Mortgage servicing companies would be required to provide clear monthly billing statements under the proposed rules.
The companies would also be required warn borrowers before interest rate hikes, and they would be required actively help them avoid foreclosure.
The rules also require companies to credit people's payments promptly, swiftly correct errors and keep better internal records.
Mortgage servicers are central in the housing crisis because they’re responsible for foreclosing on homes when people can’t make payments.
Under the rules, companies would be required to provide billing statements that explain how much of a payment is going to pay down principal, how much to interest and how much to fees.
The new agency was created under a 2010 law that overhauled financial oversight.
It is expected to finalize the rules by January 2013.
(AP contributed to this report/Edited by J. Holland)