In the September issue of the Consumer Financial Protection Bureau’s Supervisory Highlights — in which CFPB supervision staff reports on issues they are seeing in the context of examinations — the staff addresses one of the more axiomatic and frustrating realities facing creditors — trying to retract a repossession order. The difficulty stems from managing the time lag in communications between the creditor and the forwarder, and the forwarder and the repossession agent. Staff opined:
“To secure an auto loan, borrowers give creditors a security interest in their vehicles. When a borrower defaults, a creditor can exercise its rights under the contract and repossess the secured vehicle. Many auto servicers provide options to borrowers to avoid repossession once a loan is delinquent or in default. Servicers may have formal extension agreements that allow borrowers to forbear payments for a certain period of time or may cancel a repossession order once a borrower makes a payment.
