CFPB proposes changes to mortgage servicing to prevent foreclosures due to covid in 2021
Updated: Aug 17
Home foreclosures and evictions could be hated in 2021.
The Consumer Financial Protection Bureau is looking at restrictions on mortgage servicers that would prevent struggling homeowners from going straight into foreclosure.
"(CFPB) today proposed a set of rule changes intended to help prevent avoidable foreclosures as the emergency federal foreclosure protections expire. Due to the COVID-19 pandemic and ensuing economic crisis, millions of families nationwide have suffered the loss of income and nearly 3 million homeowners are behind on their mortgages.
The agency has proposed a measure to stop mortgage servicers from proceeding with foreclosures until after Dec. 31, according to the New York Times. The idea is to give borrowers more time to get a mortgage modification that reduces their monthly payments
Another rule would allow servicer to offer loan modifications to homeowners who have struggled from the pandemic without a full review required to adjust a mortgage, More than 3 million households are late on mortgage payments, and almost two million will hit the end of their forbearance periods in September, according to CFPB.