New Mortgage Rules Designed To Protect Struggling Homeowners

January 16, 2013 by The Hill

By Vicki Needham

The government took more steps on Thursday to shore up the recovering housing market with new rules that provide broader protections and greater clarity for homeowners struggling to pay their mortgages.

The Consumer Financial Protection Bureau (CFPB) announced the establishment of a new framework requiring loan servicers to offer a fair process of evaluations along with a clear set of options, such as loan modifications, to help delinquent homeowners avoid foreclosure.

“For many borrowers, dealing with mortgage servicers has meant unwelcome surprises and constantly getting the runaround,” said CFPB Director Richard Cordray, who will announce the rules during remarks in Atlanta on Thursday.

“In too many cases, it has led to unnecessary foreclosures. Our rules ensure fair treatment for all borrowers and establish strong protections for those struggling to save their homes.”

The CFPB said its goal with the new rules, which underwent public scrutiny, is to make sure that homeowners aren’t hit by the start of a foreclosure proceeding until all options are explored to stay in their home.

“People were trapped in a broken system, with deeply tragic consequences,” Cordray will say in his remarks.

Senior agency officials say the rules help fill in the holes of consumer protection.