CFPB proposes expansion of mortgage servicing protections
CFPB on Thursday proposed to require mortgage servicers to provide specific borrowers with foreclosure protections more than once over the life of their loan, clarify when a borrower becomes delinquent and take additional steps to protect borrowers from a wrongful foreclosure sale, among other things.
“The Consumer Bureau is committed to ensuring that homeowners and struggling borrowers are treated fairly by mortgage servicers and that no one is wrongly foreclosed upon,” CFPB Director Richard Cordray said in a statement. “Today’s proposal would give greater protections to mortgage borrowers.”
CFPB rules to protect consumers from harmful mortgage servicing practices took effect in January. CFPB said it is issuing this proposal as a follow-up to the previous rules and to “smooth the path for companies to better protect consumers and comply with the CFPB’s rules.”
Besides the new measures noted above, Thursday’s proposal would also:
- require servicers to notify borrowers when loss mitigation applications are complete;
- protect borrowers who are struggling during servicing transfers;
- expand consumer protections to surviving family members and other homeowners; and
- provide more information to borrowers in bankruptcy.