On Compliance: Be ready to update your loss mitigation procedures
Updated CFPB COVID-19 mortgage modification rules coming as foreclosure moratorium expires June 30
The Consumer Financial Protection Bureau’s COVID-19-pandemic-related rules continue to evolve as America reopens for business.
Notably for credit unions, the Federal Housing Finance Agency’s foreclosure moratorium on government-sponsored enterprise-related mortgages is scheduled to expire on June 30, 2021, meaning that most institutions’ pandemic-related mortgage forbearance programs will likely terminate at that time.
A recent CFPB compliance bulletin and a proposed rule to amend the agency’s Real Estate Settlement Procedures Act Regulation X “loss mitigation” rule are intended to help avert a wave of post-forbearance mortgage foreclosures. If finalized as proposed, the amendments to Regulation X would establish a temporary COVID-19 emergency pre-foreclosure review period for borrower’s principal residences until Dec. 31, 2021, and create a new mortgage loan modification option that could be offered to borrowers facing foreclosure even if they have not submitted a complete loss mitigation application.
CFPB has made several changes to its pandemic-related rules since Dave Uejio became the agency’s acting director in January 2021 following President Biden’s inauguration.
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