Mallory Edens
Jul 15, 2024
Mortgage Services May Be Extending Help to Those in Need
The Consumer Financial Protection Bureau (CFPB) has proposed new rules to assist struggling homeowners in avoiding foreclosure. These rules require mortgage servicers to prioritize helping borrowers over foreclosing on their homes when assistance is requested.
Key changes include:
Stop Dual Tracking and Limit Fees: Servicers must exhaust all assistance options before proceeding with foreclosure and limit fees during the review process.
Streamline Paperwork Requirements: Servicers will have more flexibility in reviewing borrowers for assistance, potentially speeding up the help process.
Improve Communications: More tailored notices will be required, informing borrowers of actions they can take and available assistance options.
Language Accessibility: Borrowers can request communications in the same language used in marketing materials. Notices will be provided in both English and Spanish, and oral interpretation services will be available.
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These proposed changes aim to reduce delays, improve transparency, and ensure that borrowers receive the help they need to avoid foreclosure. The new provisions would not apply to small servicers and existing requirements remain until the final rule is effective.
In many situations, foreclosure may become the desirable outcome for mortgage servicers. These proposed rules would ensure consumers are protected when the request help and make an honest effort to pay their debts. Cutting down on the number of consumers who lose their homes due to a temporary financial emergency is a crucial step toward financial parity, as such a major change can lead to a spiral of financial insecurity.
Read More: https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rules-to-help-homeowners-avoid-foreclosure/
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