CFPB proposes servicing changes to prevent foreclosures

The Consumer Financial Protection Bureau proposed a set of rules changes to prevent foreclosures as emergency protections expire.

The Proposal: The proposed rule — which exempts small servicers—would prohibit servicers from starting foreclosure until after Dec. 31, allow servicers to offer streamlined loan modification options to certain borrowers, and change certain required servicer communications to borrowers.

Background: The proposal follows last week’s CFPB compliance bulletin warning servicers to take all necessary steps to prevent a wave of foreclosures when emergency mortgage protections expire this summer and fall.

Next: ICBA is reviewing the proposal and will submit comments by the May 11 deadline.