With millions of homeowners currently in forbearance who may need help from their mortgage servicers when the pandemic-related federal emergency mortgage protections expire this summer and fall, the CFPB on Thursday warned mortgage servicers to “take all necessary steps now” to prevent a wave of avoidable foreclosures this fall.
Servicers should dedicate sufficient resources and staff now to ensure they are prepared for a surge in borrowers needing help, according to the CFPB, which says it intends to closely monitor how servicers engage with borrowers, respond to borrower requests and process applications for loss mitigation.
Further, the CFPB says it will consider a servicer’s overall effectiveness in helping consumers when using its discretion to address compliance issues that arise.
The CARES Act provides borrowers with federally backed mortgages with access to forbearance, and private lenders have also provided similar assistance, however, beginning with the expiration of the federal foreclosure moratoriums at the end of June 2021, mortgage servicers will need “ramped-up capacity” to reach out and respond to the large number of homeowners likely to need loss mitigation assistance, according to the CFPB.
Read the CFPB compliance bulletin here.