• Key Insight: What may be coming in the CFPB's newly submitted mortgage servicing final rule.
• What's at Stake: Whether mortgage servicers will face lighter regulations overall or may end up having to fulfill some new requirements in some areas.Overview bullets generated by AI with editorial review. 

The Consumer Financial Protection Bureau has finally sent its long-awaited servicing final rule to an arm of President Trump's executive office for review.

Office of Information and Regulatory Affairs records show it has received the final version of the rule originally proposed near the end of the Biden administration, according to Jonathan Kolodziej, partner at Bradley. 

OIRA's records also confirm earlier Law360 reports that the White House is reviewing the rule. CFPB did not respond to an inquiry.

"We still don't know what is in the rule, but we do know that the CFPB is moving forward," Kolodziej said, while noting there is a lot of speculation about what the version that the White House is likely to greenlight could contain.

Among these are servicing directives from President Trump's March executive order, which experts have said could reshape the bureau's role in the market.

Potential changes for loss mit, servicing errors

"The rumor mill suggests that this final rule will not really look like what the proposal was. Now you know the topics are the same, but the approach that they take for the actual rule, as far as what they require servicers to do, is going to be very different," Kolodziej said.

The March executive order's broader array of mortgage directives include a few that call for CFPB, the Department of Housing and Urban Development, the Federal Reserve, National Credit Union Administration, and banking regulators to update servicing rules.

These include "cure-first standards" for "good-faith servicing errors" and "simplifying loss mitigation requirements." The EO also calls for "aligning supervisory expectations to support portfolio mortgages servicing as a core community banking function."

Directives that call for self-correction of errors over formal penalties and streamlining of rules in the context of the Trump administration's deregulation suggests the servicing final rule likely to emerge some time within the next 90 days will involve lighter regulation.

Less regulation in some areas but potentially more in others

Even the 2023 proposal was considered streamlined relative to some servicing rules the CFPB implemented earlier, incorporating feedback from several industry groups, including the Mortgage Bankers Association, Housing Policy Council and American Bankers Association.

The Trump administration may take this a step further.

"I've heard various approaches that people think this administration might take. One of them is probably more deregulatory, deleting some existing provisions that are viewed as being problematic or overly complicating things. That would certainly be consistent," Kolodziej said.

However, there also is some speculation the final rule could include a mix of scaled-back rules in some areas and additional ones in others as officials have reviewed a broad range of feedback on the original proposal.

"I have also heard some suggestions that they may take the current complex system of regulations and replace it with a new complex system of regulations," Kolodziej said. "That's a big question out there."