With 2.5 million Americans still in mortgage forbearance plans, the Consumer Financial Protection Bureau is proposing rule changes designed to prevent people from losing their homes when the foreclosure bans expire.
The CFPB issued a proposal Monday that would:
- Prohibit lenders from starting foreclosure proceedings until after December 31 to give borrowers time to get caught up.
- Provide options to lenders to offer streamlined loan modification options to borrowers with Covid-19-related issues.
- Require lenders to communicate with borrowers in a timely way to ensure they are aware of their options.
“The nation has endured more than a year of a deadly pandemic and a punishing economic crisis. We must not lose sight of the dangers so many consumers still face,” CFPB Acting Director Dave Uejio said. “Millions of families are at risk of losing their homes to foreclosure in the coming months, even as the country opens back up. Last week we warned that servicers need to be prepared for a high volume of borrowers exiting forbearance, and today we are proposing additional guardrails and tools for servicers as they navigate the coming months. We will do everything in our power to ensure servicers work with struggling families to find solutions that prevent avoidable foreclosures.”