The Consumer Financial Protection Bureau (CFPB) has issued an interim final rule that will allot more time for communication between borrowers facing foreclosure and their mortgage servicer.
Borrowers are permitted to request a cease in communications from servicers per the Fair Debt Collection Practices Act. Generally, when a borrower becomes delinquent, the servicer is required to send notices with information about foreclosure prevention options every 45 days, but no more than once in a 180-day period for borrowers who sought a cease in communication. Some servicers, as a result, have had to send a notice on the 180th day exactly, even if it falls on a holiday or weekend. The interim final rule offers flexibility by providing a 10-day window instead. The rule will go into effect Oct. 19.
The CFPB has also proposed another rule to clarify when borrowers in bankruptcy should receive periodic statements related to their mortgage. If finalized the rule would become effective April 19, 2018.
” action should make it easier for mortgage borrowers to receive timely information from their mortgage servicers about available options for saving their home, even if they have submitted a request to cease communication,” says Richard Cordray, director of the CFPB. “In addition, we are proposing changes to clear up confusion about when to provide periodic statements with important loan information to borrowers in bankruptcy.”
Members of the industry are encouraged to submit feedback on both the interim final rule and the proposed rule. View the interim final rule. View the proposal.
Source: Consumer Financial Protection Bureau (CFPB)
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