On April 5, 2021, the CFPB issued the 2021 Mortgage Servicing COVID-19 Proposed Rule regarding additional protections for borrowers during the COVID-19 emergency.
The CFPB seeks comment on the proposed amendments to Regulation X that add or revise existing Mortgage Servicing Rule provisions and provide additional assistance for borrowers experiencing a COVID-19-related hardship.
These amendments include additional actions during live contacts with borrowers, reasonable diligence requirements for borrowers in short-term payment forbearance programs, exceptions to prohibitions on offering loss mitigation options based on evaluations of an incomplete loss mitigation applications, and prohibitions of certain foreclosure referrals.
The proposed rule, if finalized, would not change coverage of the Mortgage Servicing Rule, and thus, small servicers, as defined in Regulation Z, 12 CFR 1026.41(e)(4), would not be subject to these requirements.
Additionally, the provisions in the proposal, if finalized, would still only be applicable to a mortgage loan that is secured by a property that is a borrower’s principal residence. 12 CFR 1024.30(c)(2).
The Bureau has published:
The Proposed Rule follows the CFPB’s Bulletin 2021-02 Supervision and Enforcement Priorities Regarding Housing Insecurity alerting lenders to take all necessary steps to prevent a wave of avoidable foreclosures this coming fall.
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