WASHINGTON — The newly established Consumer Financial Protection Bureau proposed tighter rules on Thursday for mortgage service companies, which collect mortgage payments from homeowners on the lender’s behalf.

The recommendations were authorized in part by the Dodd-Frank Act, passed in 2010, but gained momentum after a $26 billion settlement earlier this year with five of the nation’s biggest banks over foreclosure practices.

The new rules would require the service companies to provide monthly statements to customers, warn them before interest rates are adjusted and offer more options to avoid foreclosures.

State and federal investigations into foreclosure practices found widespread examples of hasty foreclosures, forged signatures and lost paperwork among the companies that collected mortgage payments and monitored homeowner compliance.

Source: NYtimes