The CFPB recently issued a compliance bulletin on “Supervision and Enforcement Priorities Regarding Housing Insecurity,” stating that the CFPB will be paying attention to how mortgage servicers respond to borrowers requesting loss mitigation assistance.
Bulletin 2021-02 is intended to warn mortgage servicers that they should be prepared for “a wave of avoidable foreclosures this fall” when COVID-19 related federal mortgage protections expire. The Bulletin stated that the CFPB expects an “extraordinarily high volume of loans needing loss mitigation assistance at relatively the same time” and that the agency is concerned borrowers may not receive effective communication from servicers and that borrowers’ loss mitigation applications are at risk of not being adequately processed. With this Bulletin the CFPB announced its intention to prioritize mortgage servicing in its enforcement and supervision work within the coming year.
In the Bulletin the CFPB urged services to dedicate “sufficient resources and staff to ensure they can communicate clearly with borrowers, effectively manage borrower requests for assistance, and thereby reduce foreclosures.” Specifically the CFPB highlighted eight areas where they would pay particular attention, including:
In announcing the Bulletin the Acting CFPB Director Dave Uejio stated “There is a tidal wave of distressed homeowners who will need help from their mortgage servicers in the coming months. Responsible servicers should be preparing now. There is no time to waste, and no excuse for inaction. No one should be surprised by what is coming.”
Alongside the publication of the Bulletin and the CFPB’s separate Notice of Proposed Rulemaking (see link below), the CFPB also issued a blog post on mortgage servicer communication strategies during COVID-19. The post discussed the need for servicers to understand their consumers’ contact preferences, which is the key to homeowner engagement, and to use all available tools to reach borrowers, including non-traditional mail techniques such as:
WBK’s coverage of the CFPB’s proposed rule to amend Regulation X can be found here.