Upcoming CFPB rule change regarding foreclosures

[Luke Rorech]

The Consumer Financial Protection Bureau announced a new rule today to prevent a wave of foreclosures due to coronavirus.

Here is a summary from the New York Times:

“In most cases, lenders will only be allowed to foreclose on a home if it is abandoned, if the borrower has not responded to messages for at least 90 days, or if the borrower has been formally evaluated for all available “loss mitigation” options (such as a loan modification) and none are viable.

Servicers will also be allowed to proceed with foreclosures for borrowers who were already 120 or more days delinquent before March 1, 2020.

The new rule also allows mortgage servicers to more easily offer some loan modifications so long as the changes do not increase a borrower’s monthly payments or extend the loan’s term more than 40 years beyond the modification date.”

Nice for current homeowners but with the current high prices and low inventory, anyone hoping for a wave of foreclosures or crash may be waiting awhile. 

Thoughts?

https://www.consumerfinance.go...