Hon. Michael G. Oxley: “I rise in support of H.R. 1025, the ``Mortgage Servicing Clarification Act,'' providing a narrow but necessary exemption…”

“I rise in support of H.R. 1025, the ``Mortgage Servicing Clarification Act,'' providing a narrow but necessary exemption for mortgage servicers from certain requirements of the Fair Debt Collection Practices Act (FDCPA) with respect to federally related mortgage loans secured by a first lien. I want to commend Congressman Royce and Congressman Kanjorski for introducing this legislation, as well as Ranking Member Frank for helping to guide this important measure through the legislative process. This legislation passed by a voice vote in the 107th Congress and passed last Congress on a vote of 424-0. When a mortgage servicer acquires the right to service a loan portfolio, the servicer is generally exempt from complying with the FDCPA because the Act extends the creditor's exemption to the new servicer. The problem arises because in a typical loan servicing transfer, a percentage of the loans transferred are delinquent or in default. These loans are technically covered by FDCPA provisions requiring the new mortgage servicer to include harshly worded notices to its borrowers identifying the servicer as a ``debt collector'' and warning the borrower that any information he or she discloses to the servicer will be used in the debt collection process. These notices are commonly referred to as ``Miranda notices,'' and they can have the unintended consequences of discouraging borrowers from contacting their new service provider.”