news.cuna.org/articles/119287-cfpb-proposes-foreclosure-moratorium-until-2022
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CFPB proposes foreclosure moratorium until 2022

April 5, 2021

The Consumer Financial Protection Bureau (CFPB) Monday proposed a set of rule changes intended to prevent foreclosures and assist consumers as the emergency federal foreclosure protections expire. The proposal includes temporary amendments to Regulation X’s mortgage servicing requirements regarding loss mitigation. Due to the COVID-19 pandemic and ensuing economic crisis, millions of families nationwide have suffered the loss of income and nearly 3 million homeowners are behind on their mortgages.

The CFPB’s proposal recognizes that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain.

The CFPB’s proposal, if finalized, would:

  • Generally prohibit servicers from starting foreclosure until after Dec. 31, 2021. The CFPB is seeking public input on that date, as well as whether there are more limited ways to achieve the same purpose.
  • Permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application.
  • Make temporary changes to certain required servicer communications to make sure that, during this crisis, borrowers receive key information about their options at the appropriate time.