The Consumer Financial Protection Bureau (CFPB) said the recent finalization of federal mortgage servicing regulations amendments would address potential foreclosure surges while aiding the nation’s economy.
Adjustments to the federal mortgage servicing regulations would reinforce the ongoing economic recovery amid the federal foreclosure moratoria phase-out and protect mortgage borrowers from surprises as they exit forbearance. Additionally, the rules cover loans on principal residences, generally exclude small servicers, and will take effect on Aug. 31, 2021.
“As the nation shifts from the COVID-19 emergency to the economic recovery, we cannot be complacent about the dangers we still face,” CFPB Acting Director Dave Uejio said. “An unchecked wave of foreclosures would drain billions of dollars in wealth from the Black and Hispanic communities hardest hit by the pandemic and still recovering from the impact of the Great Recession just over a decade ago. An unchecked wave of foreclosures would also risk destabilizing the housing market for all consumers.”
The rules provide borrowers with a meaningful opportunity to pursue loss mitigation options, allow mortgage servicers to help borrowers faster, and tell borrowers their options.
“We are giving homeowners the time and opportunity to make informed decisions about the best course of action for them and their families, whether that is seeking a loan modification or selling their home,” Uejio said. “And we are giving mortgage servicers the flexibility they need to serve homeowners with dignity while managing an unprecedented volume of borrowers seeking assistance.”
The CFPB will be working in conjunction with other federal agencies in the next few months to ensure a transition to the post-pandemic housing market through increased borrower outreach in sharing mortgage option information.