CFPB Says Servicers Should Offer Loss Mitigation Beyond COVID Hardships

Source: National Mortgage News

The Consumer Financial Protection Bureau said it expects mortgage servicers to continue offering forbearances, deferrals and loan modifications to consumers experiencing financial hardships unrelated to the COVID-19 pandemic. 

The CFPB said Wednesday that streamlined loss mitigation options can be made available to any borrower. Though the CFPB's special foreclosure protections for certain delinquent borrowers expired at the end of 2021, the bureau has invoked the "temporary flexibilities" in its servicing rules to make loss mitigation programs available to consumers experiencing a financial hardship, even if the borrower's financial troubles having nothing to do with COVID. 

"We expect servicers to continue to utilize all the tools at their disposal — including, if available, streamlined deferrals and modifications that meet the conditions of the CFPB's COVID-19-related mortgage servicing rules — in their efforts to keep consumers in their homes," Lorelei Salas, the CFPB's assistant director for supervision policy and acting assistant director for supervision examinations, said in a blog post. "As long as these streamlined loss mitigation options are made available to borrowers experiencing hardship due to the COVID-19 national emergency, those same streamlined options can also be made available under the temporary flexibilities in the rule to borrowers not experiencing COVID-19-related hardships.