Consumer Financial Protection Bureau plans to suspend foreclosures until 2021

The Consumer Financial Protection Bureau said on Monday it was considering new rules to avoid a wave of foreclosures later this year as millions of homeowners are no longer allowed to defer mortgage payments.

Last year, the federal government suspended foreclosures and evictions for Federal Housing Administration insured mortgages as the coronavirus pandemic left millions unemployed. Fannie Mae and Freddie Mac have done the same for single-family home borrowers with loans secured by the two mortgage buyers. The initiatives provided borrowers with relief of up to one year and suspended late fees and penalties.

In February, nearly 3 million U.S. homeowners were behind on their home loans, with about 2.1 million outstanding mortgages and at least 90 days overdue, according to the CFPB. If current trends continue, there could still be 1.7 million of these loans by September, the CFPB said.

A rule proposed by the agency would prohibit mortgage agents from initiating the foreclosure process before December 31. The CFPB is also considering allowing agents to make foreclosures before the end of this year, in some cases as if they are trying to contact an unresponsive borrower.

The CFPB is also evaluating a rule that would allow service providers to offer “certain simplified loan modification options” to borrowers facing difficulties caused by the pandemic, and changes to ensure that service providers notify borrowers of their changes. timely options. The agency is seeking public input on proposed rule changes until May 11.

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