The CFPB proposed new rules Wednesday that would establish new requirements for mortgage servicers to help borrowers in need of assistance avoid foreclosure. The proposed changes would also make it simpler for servicers to offer assistance by reducing paperwork requirements, improve communication with borrowers, and ensure critical information is provided in languages borrowers understand.
America’s Credit Unions’ legacy organizations responded to a 2022 CFPB request for information on protections for borrowers noting that credit unions consistently face challenges despite their willingness to make or refinance smaller balance loans.
Specifically, the proposal would:
- Require servicers to try to help borrowers first, before foreclosing, when they request assistance;
- Give servicers more flexibility to review borrowers for each option individually;
- Require servicers to provide more tailored notices to borrowers; and
- Require servicers to provide the improved notices in both English and Spanish to all borrowers, as well as make available oral interpretation services in telephone calls with borrowers.
Small servicers, “generally those that service 5,000 or fewer mortgage all of which the servicer or affiliates own or originated” would be exempt from all requirements of the proposed rule.
Comments are due to the CFPB by Sept. 9. America’s Credit Unions will review the proposal and solicit member feedback to inform the organization’s comments to the bureau.
