Expanded foreclosure protections being considered by CFPB
WASHINGTON (11/21/14)--A government plan announced Thursday would make sure that if a mortgage borrower dies, surviving family members and others who inherit or receive property have the same foreclosure protections as the original loan holder.
The Consumer Financial Protection Bureau's plan could end up requiring mortgage servicers to provide certain borrowers with foreclosure protections more than once over the life of a loan, to put in place additional servicing transfer protections, and to take steps to protect borrowers from a wrongful foreclosure sale.
In effect, the CFPB proposal extends the reach of bureau mortgage servicing rules that went into effect Jan. 10 this year and which require servicers to maintain accurate records, give troubled borrowers direct and ongoing access to servicing personnel, promptly credit payments, and correct errors on request.
The CFPB said in a release its proposal also would:
- Require servicers to notify borrowers when loss mitigation applications are complete;
- Do more to protect struggling borrowers during servicing transfers;
- Clarify servicers' obligations to avoid dual-tracking and prevent wrongful foreclosures;
- Clarify when a borrower becomes delinquent; and
- Provide more information to borrowers in bankruptcy by requiring periodic mortgage staements.
The proposed rule and disclosures will be open for public comment for 90 days after their publication in the Federal Register.
The CFPB has provided a summary of the rule.