CFPB warns servers: “Unprepared preparation is unacceptable”

the Consumer Financial Protection Bureau (CFPB) warns managers that it is speeding up law enforcement and will specifically monitor how managers deal with borrowers coming out of forbearance.

In a compliance bulletin Thursday, the CFPB said it will monitor the work of duty officers to prevent a wave of foreclosures from occurring this fall. “Not being prepared is unacceptable,” the Bureau said. The CFPB will closely monitor how managers interact with borrowers, respond to borrower requests and process loss mitigation requests.

“There is a tidal wave of distressed homeowners who will need the help of their mortgage agents in the months to come. The responsible officers should prepare now. There is no time to waste and no excuse for inaction. No one should be surprised at what is coming, ”said Dave Uejio, CFPB interim director.

Since March 29, the Mortgage Bankers Association estimates 2.5 million owners are still in some form of tolerance. That number is steadily approaching half of the peak seen in April 2020, but what was once a wave of exits is now closer to a trickle. It took nearly five months for the national abstention rate to drop by a full percentage point – from 6% to less than 5% last week, as economists point out that those who stay in the longest Loss mitigation are likely to need it the most. .

Federal moratoriums on foreclosures will expire at the end of June. At the current rate of improvement, Black Knight data shows that the number of homeowners considered to be seriously delinquent on their mortgages is expected to drop to 1.8 million at that time.

From abstention to post-abstention: how to make the process effective

To cope with the large volume of loans still in forbearance, mortgage loan managers must have functional, flexible and efficient forbearance processes in place. Here are some concrete steps to create this process.

Presented by: FICS

In particular, the CFPB declared that it would pay particular attention to the quality of services:

Be proactive. “Officers should contact forbearers before the end of the forbearance period so that they have time to ask for help.”

Work with borrowers. “Service officers should ensure that borrowers have all the necessary information and should help borrowers obtain the documents and other information needed to assess borrowers for assistance.”

Addressing of linguistic access. “CFPB will carefully review how administrators manage communications with borrowers with limited English proficiency and maintain compliance with the Equal Credit Opportunity Act and other laws.

Fairly assess income. “When administrators use income to determine eligibility for loss mitigation options, administrators should assess borrowers’ income from public assistance, child support, alimony, or other sources in accordance with the anti-discrimination protections of the Equal Credit Opportunity Act. ”

Fast processing of requests. “The CFPB will take a close look at the conduct of maintenance workers where wait times are longer than industry averages.”

Prevent preventable foreclosures. “The CFPB will expect operators to comply with foreclosure restrictions in Regulation X and other federal and state restrictions to ensure that all homeowners have the opportunity to save their home before foreclosure occurs.”

“Our first priority is to ensure that families in difficulty get the help they need,” said Uejio. “Military personnel who prioritize troubled families have nothing to fear from our oversight, but we will hold accountable those who harm homeowners and families.”

Thursday’s bulletin is the second time in two days that the CFPB has promised stricter enforcement as the economy gradually opens up. On Wednesday, the Bureau announced that it was canceling seven of its temporary policies put in place to protect consumers during the pandemic, starting April 1.

By broadcasting its intention to use all of its authority under the Dodd-Frank Act, the Bureau rescinded leniency measures regarding HMDA data reporting, loan modifications, valuation standards and credit reports.

“Businesses should have had sufficient time to adapt to the pandemic and should now be able to adequately comply with the law and respond to enforcement actions or surveillance activities without the flexibility offered by the declaration, ”said the Bureau after withdraw his signatory of the Statement on the Office’s Surveillance Response to the COVID-19 Pandemic.

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