CFPB Instructs Servicers to Put together for Forbearance Expirations

The Consumer Financial Protection Bureau (CFPB) warned service technicians to prepare for an onslaught of distressed homeowners in the summer or after the moratoria expires.

It is a “known unknown” industry specialist who has been expecting the The current high rate of forbearance plans could pdrove problematically down the street.

The CFPB warns the services “to take all necessary steps in the coming months to prevent a wave of avoidable foreclosures”.

Most recently, on February 16, the Biden government extended the moratorium on mortgage foreclosures for state-guaranteed mortgages until the end of June. (The foreclosure prohibition was previously scheduled for March 31st).

Millions of homeowners with forbearance plans today will need help from their servants when the federal pandemic-related mortgage protection expires this summer and fall. The CFPB says servicers should now devote enough resources and manpower to ensure they are prepared for a surge in borrowers in need of help.

The CFPB says it will closely monitor how servicers work with borrowers, respond to borrower inquiries, and process mitigation requests. The CFPB will consider a servicer’s overall effectiveness in assisting consumers in addressing compliance issues in its sole discretion.

“There is a tidal wave of distressed homeowners who will need help from their mortgage servants in the months ahead. Responsible servicers should prepare now. There is no time to waste and no excuse for inaction. Nobody should be surprised what is coming, ”said Dave Uejio, CFPB deputy director. “Our first priority is to ensure that families in difficulty get the support they need. Servicers who put families in trouble first have nothing to fear, but we will hold those who harm homeowners and families accountable. “

Here are the CFPB’s instructions for servicers:

  • Be proactive. Servicers should contact borrowers forbearance before the grace period expires so they have time to seek help.
  • Work with borrowers. Servicers should work to ensure that borrowers have all the necessary information and help borrowers obtain documents and other information necessary to evaluate borrowers for assistance.
  • Address language access. The CFPB will carefully examine how servicers manage communications with borrowers with limited English proficiency and ensure compliance with the Equal Credit Opportunity Act and other laws.
  • Evaluate income fairly. When service providers use the income to determine eligibility for loss mitigation, the service providers should assess borrowers’ income from public support, alimony, alimony or other sources in accordance with the anti-discrimination protection of the Equal Credit Opportunity Act.
  • Process inquiries immediately. The CFPB will closely examine the behavior of servicers when hold times are longer than the industry average.
  • Avoid avoidable foreclosures. The CFPB expects service workers to comply with foreclosure restrictions in Regulation X and other state and state restrictions to ensure all homeowners have an opportunity to rescue their homes before foreclosure is initiated.

The CFPB concludes that as long as the servicers continue to demonstrate effectiveness in assisting consumers, as set out in Thursday’s compliance bulletin, the office will continue to operate in line with the April 3, 2020 joint statement on regulatory and Assessing enforcement practices in relation to the relevant rules for mortgage servicing is based on the COVID-19 Emergency and CARES Act, which provides flexibility with regard to certain timing requirements in the regulations.

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