Streamlining the process would allow servicers to get homeowners into less burdensome payments faster, CFPB says. Normally, borrowers need to submit a myriad of documents - including proof of income, such as pay stubs, tax returns and recent bank statements - before a servicer can make a decision. The streamlined process would allow servicers to offer some loan modification options based on incomplete applications. In addition to requiring mortgage servicers to undertake a review period, the CFPB is also proposing a streamlined loan modification process, which typically allows homeowners to apply to have their loan interest rate reduced, extend the term of their loan and/or reduce their monthly payments. The agency is seeking public comments through May 11 before issuing a final rule. The CFPB's plan issued Monday is a proposal at the moment. The CFPB's proposed rule would cover all homeowners, including those with mortgages through private lenders such as banks. Private lenders and servicers also set up their own forbearance programs. Many of the current forbearance programs were set up in the CARES Act last year and apply to federally-backed loans offered through agencies including Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Housing and Urban Development. This new review period would be in addition to existing rules that bar loan servicers from starting the foreclosure process until a homeowner is more than 120 days delinquent on their home loan. To help homeowners who are behind on their mortgages, the CFPB is proposing a new rule that would establish a "temporary Covid-19 emergency pre-foreclosure review period" that would essentially block mortgage servicers from starting the foreclosure process until after December 31, 2021. "The CFPB is proposing changes to the mortgage servicing rules that will ensure servicers and borrowers have the tools and time to work together to prevent avoidable foreclosures, which disrupt lives, uproot children and inflict further costs on those least able to bear them." "Emergency protections for homeowners will start to expire later this year and by the fall, a flood of borrowers will need assistance from their servicers," CFPB Acting Director Dave Uejio said Monday. That could increase exponentially as forbearance programs start to wind down this fall.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |