New Proposed Rules

The Consumer Financial Protection Bureau (CFPB) has an additional set of measures designed to expand foreclosure protections for mortgage borrowers, specifically surviving family members and other homeowners with the same protections as the original borrower.

Chief among the proposed rules, as reported by DS News, would be a requirement that servicers must provide additional foreclosure protections to borrowers who have already worked through the loss mitigation process previously and recovered. Under the current rules, servicers are already required to provide certain protections, including the right to be evaluated under CFPB requirements for foreclosure avoidance options once during the life of the mortgage.

The rules would:

• Layer another level of red tape onto the foreclosure process and require additional review after a borrower defaults under an approved mod.
• Expand the definition of “borrower” to include potential “successors-in-interest”, and expand that definition to include parties who may not have a record title interest
• Extend the prohibition against dual-tracking to servicing transferees
• Require a review of Federal Bankruptcy and FDCPA procedures vis-à-vis notification

The proposed rule would also require servicers to offer those same protections again for borrowers who have brought their loans current at any time since the last loss mitigation application. The bureau says the rule is largely designed to protect those who obtain a permanent loan modification and then later suffer an unrelated hardship that could create additional struggles, such as a job loss or the death of a family member.

The public comment period on the proposed rules is open until February 20, 2015.

Also included in the proposal are a number of provisions that clarify previous regulations, including protections for mortgage heirs; communications regarding loss mitigation applications; working with borrowers during servicing transfers; providing information to bankrupt borrowers; clarifying dual-tracking and wrongful foreclosure requirements; and clarifying the meaning of “delinquency”:

Read the full story in DS News

Read details about CFPB’s proposal

Read a copy of the proposed rule, and information on how to submit comments