CFPB Proposes New Restrictions On Mortgage Servicers Before Commencing Foreclosures

Highlights

• The Consumer Financial Protection Bureau announced a proposed rule to amend the 2013 Mortgage Servicing Rules to require additional support for defaulting borrowers.
• The proposed rule would add additional requirements for servicers before they foreclose on the property of defaulted borrowers and require servicers to comply with enhanced protections previously made available during the COVID-19 pandemic.
• Under the proposed rule, servicers would no longer be required to collect a "complete application" prior to offering loss mitigation options. The loss mitigation review cycle would begin as soon as the borrower requests mortgage relief. Thereafter, "dual tracking" would be prohibited, and borrowers would be protected against the accrual of certain fees.