In addition to short-term forbearances or repayment plans, servicers may offer certain additional COVID-19-related loan modification options, based on an incomplete application, if the following criteria are met:
However, the Rules include new exceptions to that general prohibition. Under the existing Mortgage Servicing Rules, servicers are prohibited from offering any loss mitigation option based on an incomplete application from the borrower. Describe any available forbearance extension, repayment options, and other loss mitigation options available to the borrower at the time of the live contact, and the actions the borrower must take to be evaluated for such loss mitigation options andĬOVID-19 Streamlined Loan Modification Options.Inform the borrower of the date the borrower’s current forbearance plan is scheduled to end.For borrowers in a forbearance plan at the time of live contact, the servicer must:.Provide the borrower at least one way they can find contact information for homeownership counseling services, such as referencing the borrower’s periodic statement.Describe the available forbearance programs to the borrower and the actions the borrower must take to be evaluated for the programs, unless the borrower states that they are not interested in receiving that information and.Inform the borrower that forbearance programs are available for borrowers experiencing a COVID-19-related hardship.For borrowers not in a forbearance plan at the time of contact, the servicer must:.When a servicer makes live contact with a borrower, as required under the existing Mortgage Servicing Rule, the servicer must provide the following information:
Therefore, the new rules can apply to portfolio loans, rather than just federally backed mortgage loans (such as Fannie Mae, Freddie Mac, FHA, or VA loans), that were subject to the CARES ActĮarly Intervention Live Contact. Unlike the prior COVID-19-related foreclosure moratoriums, the Rules are not limited to COVID-19-related borrower protections or the CARES Act and apply to “federally-related mortgage loans” (as defined under RESPA) that are secured by the borrower’s principal residence. The new temporary provisions generally prevent a servicer from initiating a new foreclosure, or completing a pending foreclosure before January 1, 2022. The Rules remain in effect until December 31, 2021.
The Rules are designed to protect borrowers from “avoidable foreclosures” and impose new “procedural safeguards” that loan servicers must follow now that the COVID-19 foreclosure moratorium has come to an end. The Consumer Financial Protection Bureau (“CFPB”) announced post-COVID-19 mortgage servicing rules that went into effect Aug(“Rules”).
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