U.S. consumer watchdog considers rules to prevent foreclosures, Real Estate News, ET RealEstate
Last year, the federal government suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration as the coronavirus pandemic left millions unemployed.
Fannie Mae and Freddie Mac has done the same for borrowers in single-family homes with loans secured by two mortgage buyers. The initiatives provided borrowers with relief of up to one year and suspended late fees and penalties.
In February, nearly 3 million U.S. homeowners were behind on their home loans, with about 2.1 million mortgages in forbearance and at least 90 days overdue, according to the CFPB. If current trends continue, there could still be 1.7 million such loans by September, the CFPB said.
A rule proposed by the agency would prohibit mortgage managers from starting the foreclosure process before December 31. efforts to contact an unresponsive borrower.
The CFPB is also evaluating a rule that would allow managers to offer “certain simplified loan modification options” to borrowers facing difficulties caused by the pandemic, and changes to ensure that managers notify borrowers of their options by timely. The agency is seeking public comments on its proposed rule changes until May 11.