Housing advocates praise CFPB’s emphasis on helping homeowners at risk of losing their homes, but urge a different approach – YubaNet
Washington, DC, April 5, 2021 – Housing advocates from the National Consumer Law Center, the Americans for Financial Reform Education Fund, the National Community Stabilization Trust and the National Housing Law Project have responded to the Consumer Financial Protection Bureau’s (CFPB or Bureau) proposed rules issued today to impose a pre-foreclosure review period (essentially a moratorium) until December 31, 2021 on mortgages for primary residences and to provide more awareness to homeowners who have faced challenges related to the COVID-19. Advocates urged the Bureau to replace its market-wide moratorium with an individualized requirement for managers to comply with strict requirements before they can trigger a foreclosure, including reviewing borrowers for streamlined loan modifications. that reduce the borrower’s payment.
This rule proposal comes one week after the Bureau published a newsletter on its plans to improve monitoring and enforcement of mortgage management, including for homeowners with limited English proficiency. Advocates welcomed this Bulletin as a step in the right direction and stressed the importance of the Bureau’s increased oversight of the mortgage market as millions of homeowners, including many people of color, seek lasting arrangements with their families. mortgage companies. A particularly important role of the Office is to ensure that homeowners who have mortgages that are unsecured by the government (including those with private loans, manufactured home loans and land contracts) and homeowners with d ‘other financial hardships (including those facing foreclosures have the chance to save their homes from foreclosure.
However, the Bureau’s proposal announced today to impose a broad moratorium on foreclosures until the end of the year is not the right solution and could make it more difficult for homeowners. knowing that they should seek permanent solutions sooner, which will cost them substantial home equity and create an increased risk of local burns. Instead of the moratorium, the groups urged the bureau to prevent managers from filing a foreclosure request unless they first meet stringent requirements to establish borrower contact and review the borrower for each. housing conservation solution that the borrower qualifies for, including simplified modifications. These protections should be available to the crush of homeowners who drop forbearance in the coming months, as well as homeowners who are severely delinquent but have not entered into forbearance arrangements with their mortgage managers.
In addition, the Bureau’s approach to increasing access to simplified loss mitigation options fails to provide adequate protection to consumers. The groups appreciate the Bureau’s recognition of the importance of access to simplified changes, as hundreds of thousands of borrowers will contact their agents during the same time frame. However, a borrower who tells his mortgage manager that he is unable to resume his regular monthly mortgage payment, whether or not he leaves a forbearance, should have access to key consumer protections, including appeal rights. and stopping the seizure process.
Finally, advocates encourage the Bureau to adopt additional protections, including clearly written notices detailing post-forbearance options, to ensure owners know their options, can make payment arrangements before the start of the forbearance. foreclosure and do not face claims. for lump sum reimbursements.
A letter sent at the CFPB on March 12, 2021, by rights groups, called for more targeted action along the lines described above.
In addition, 47 national, state and community housing, civil and legal rights groups sent a letter to CFPB last January, looking for a range of changes to protect homeowners from foreclosure.