Summary outlines proposal on preventing foreclosures

(April 23, 2021) The set of proposed rules proposed earlier this month by the CFPB aimed at preventing “avoidable foreclosures” as the emergency federal foreclosure protections expire is the focus of a recent summary from NASCUS.

As are all NASCUS summaries, it is available to members only.

CFPB said, on April 9 when it issued the proposals, that is seeks to “ensure that both servicers and borrowers have the tools and time they need to work together to prevent avoidable foreclosures, recognizing that the expected surge of borrowers exiting forbearance in the fall will put mortgage servicers under strain.”

The NASCUS summary outlines the key provisions of the proposal, which include:

  • A special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after Dec. 31, 2021.
  • A provision permitting servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application.
  • Temporary changes to certain required servicer communications to ensure that borrowers receive key information about their options at the appropriate time during the pandemic.

Comments on the proposals are due May 10.

NASCUS Summary: Proposed Rule/Request for Information on Protections for Borrowers Affected by the COVID-19 Emergency under RESPA