The CFPB is continuing their efforts to minimize the number of foreclosures resulting from the COVID-19 Pandemic. As such, it recently proposed changes to the mortgage servicing rules which set out to give …both servicers and borrowers…tools and time…to prevent avoidable foreclosures….
The CFPB warns that nearly 1.7 million borrowers could leave forbearance programs later this year. As a result, it wants additional guardrails and tools in place when it comes to borrowers’ principal residences. The proposal seeks to:
Give Borrowers Time
Servicers would generally be prohibited from starting foreclosure until 2022.
Give Servicers Options
Keep Borrowers Informed
When making live contact, servicers would generally need to determine whether someone is experiencing a COVID-19 related hardship and either provide information on available options or information on the borrower’s current forbearance program and any future options. This would be on a temporary basis.
The CFPB is looking to move quickly on this proposal. Comments are due by May 10, 2021, with a proposed effective date of August 31, 2021.
On another note, the CFPB also proposed to delay the effective date for changes to the Fair Debt Collection Practices Act (FDCPA). Those changes are scheduled to take effect November 30, 2021 and the proposal seeks to delay the effective dates until January 29, 2022. Comments will be accepted for 30 days after the proposal is published in the Federal Register.
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!