FHFA Requires Early Compliance With CFPB Servicing Rule

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As previously reported, on June 24, 2021, the Federal Housing Finance Agency (FHFA) announced the extension of the Fannie Mae and Freddie Mac moratorium on single-family foreclosures from June 30, 2021 to July 31, 2021.

On June 28, 2021, the Consumer Financial Protection Bureau (CFPB) issued a servicing rule that becomes effective on August 31, 2021. For many mortgage loans, the rule will preclude the servicer from making the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process because of a delinquency before January 1, 2022.

On June 29, 2021, FHFA announced that it will not permit Fannie Mae or Freddie Mac servicers to make a first notice or filing that will be prohibited by the CFPB rule before the CFPB rule takes effect. The action effectively implements the prohibition under the CFPB rule for Fannie Mae and Freddie Mac servicers one month before the rule becomes effective.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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