Regulatory Alert examines CFPB’s mortgage servicing rule
NCUA issued a Regulatory Alert (21-RA-08) this week on the Consumer Financial Protection Bureau’s June 30 final Regulation X rule to assist borrowers affected by the pandemic. The final rule only applies to servicers that service mortgages secured by a borrower’s principal residence and does not apply to small servicers.
The rule is effective on August 31 and NCUA urges credit unions to “review the rule in its entirety and ensure compliance with these temporary amendments.”
- Defines COVID-19 related hardship to mean “a financial hardship due, directly or indirectly, to the national emergency for the COVID-19 pandemic declared in Proclamation 9994 on March 13, 2020.”
- Temporarily modifies early intervention live-contact messages and reasonable diligence obligations.
- Authorizes servicers to offer loan modifications to borrowers experiencing a COVID-19 related hardship based on an evaluation of an incomplete application if specified criteria are met.
- Establishes temporary special COVID-19 loss mitigation procedural safeguards to ensure that a borrower has a meaningful opportunity to pursue loss mitigation options.