CFPB Proposes Mortgage Servicing Changes to Prevent Wave of COVID-19 Foreclosures

Updated 05/10/2021

This tool summarizes the CFPB’s proposed rule temporarily amending RESPA’s loss mitigation options due to the COVID-19 pandemic. The following are the key takeaways of the changes:

  1. Unless certain requirements are met, servicers cannot initiate foreclosure proceedings until after December 31, 2021.
  2. Regulation X will include “COVID-19 Related Emergency” as a defined term.
  3. Servicers may offer streamlined loan modifications options to borrowers who experience COVID-19 related hardships, instead of requiring the completion of loss mitigation options, as is currently required.
  4. Expanded early intervention provisions, requiring servicers to specifically inquire about COVID-19 related hardships and providing applicable options to borrowers upon making live contact.

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