Newsletter — July 2021
The Consumer Financial Protection Bureau (CFPB) announced a new foreclosure rule last month that throws delinquent borrowers with federally backed loans a lifeline when federal forbearance programs end July 31.
Effective Aug. 31 through Dec. 31, 2021, the new rule will give the 2 million homeowners who are still in mortgage forbearance more options for staying in their home, and make it more difficult for servicers to move forward with foreclosure proceedings.
More than 3% of all borrowers are so far behind on their payments that, according to CFPB Acting Director Dave Uejio, foreclosure could begin immediately once the ban ends. “We have never before seen this many borrowers so far behind on their mortgages,” Uejio said.
Under the new guidelines, servicers can’t begin the foreclosure process unless a property is abandoned, the borrower is more than 120 days delinquent and hasn’t responded to outreach in more than 90 days, or the homeowner was more than 120 days delinquent prior to March 1, 2020.
It’s a step back from the bureau’s proposal earlier this year to delay foreclosures altogether until 2022 — a measure the Credit Union National Association (CUNA) called “unnecessary” and “overbroad to the point of being unconstitutional.”
The new foreclosure rule, which only applies to primary residences, also stipulates that servicers give homeowners three options to avoid losing their home:
- Resume regular payments and move missed payments to the end of the mortgage,
- Modify the length or interest of the loan, or
- Sell the home
In addition to existing rules that prevent servicers from starting the foreclosure process until a borrower is more than four months behind on payments, the new rule “gives people a bridge to get into those options for loan modification,” said Uejio’s senior advisor, Diane Thompson. “But that only works if people take advantage of that and do the hard work of assessing what the best path forward for them and their families is.”
Blue Streak Docs can deliver accurate and speedy pre-foreclosure searches and handle your document retrieval needs to protect your portfolio. If you haven’t worked with us yet, give us a try and get your 5th order FREE!
Employee Of The Month
Congratulations to Kenya for winning Employee of the Month! Kenya started off as a Document Retrieval Analyst and recently became our Production Services Administrative Assistant. Kenya's attention to detail and dedication made her a perfect fit for this position. Within the short time that Kenya has been in this new position, she has already achieved so much. She continuously goes above and beyond researching and collecting data to find new resources for our team. Kenya has taken on this new role with ease, and we are super excited to see her grow. Congratulations, Kenya!