Mortgage Servicing Clarification Act

H.R. 1025, the Mortgage Servicing Clarification Act, aims to change how certain mortgage companies communicate with homeowners regarding their debt. Under current law, companies classified as debt collectors must include specific disclosures in every communication, stating that they are attempting to collect a debt and that any information obtained will be used for that purpose.

This bill would exempt mortgage servicers from providing these specific disclosures if their primary business is managing current loans and their debt collection activities are only a minor part of their overall operations. For citizens, this means that if your mortgage is transferred to a new servicer while you are in default, that company may not be required to include standard debt collection warnings in their correspondence, provided they primarily manage non-delinquent accounts.