Government Has Updated Its Rules to Help Homeowners Deal With Foreclosures
If you are not ready for this, home ownership can be a serious financial burden . When the burden becomes so overwhelming that consumers are facing foreclosure, the Consumer Financial Protection Bureau (CFPB) is committed to helping with specific rules for mortgage officers. They have recently made some changes to these rules.
A couple of years ago, the CFPB laid down some mortgage lending rules to help needy borrowers facing foreclosures. They issued a press release last week stating that they had revised these rules and updated them. Here are a few things that will change:
Protection of heirs and surviving family members: The new rules expand the protection of successors, including those who become homeowners, “where property is transferred after the death of a relative through divorce or legal separation through certain trusts, between spouses, parent-to-child or the death of a borrower who is a joint tenant ”. In essence, these assignees receive the same protection as the original borrower.
Added protection against foreclosures during the term of the loan: According to the existing rules, the mortgage maintenance staff must offer the borrower certain protection measures against foreclosures once during the term of the loan (for example, an estimate to avoid foreclosure from the beginning). The new rule requires them to offer this protection again when the borrower receives the current loan.
Additional Information During Loss Mitigation : When a borrower is unable to make a payment, he can apply for “loss mitigation”. In general terms, this is the process of getting help from your loan provider to avoid foreclosure. New CFPB rules require maintenance personnel to offer more information during this process. For example, they will have to inform the borrower when their loss mitigation application will be completed, which is important because some of the protections do not kick in until that application is completed.
The CFPB says that the updates have been completed, but they will not take effect for some time to allow service providers to update their systems and procedures. Housingwire estimates it will take 12-18 months for the rules to be fully implemented after they are published by the CFPB. Aside from this, there are a few additional changes and you can check the CFPB press release below for more information.
Photo by Cameron Parkins .