New Mortgage Rules Enforced to Deter Wrongful Home Foreclosures

by San Antonio Attorney

The agency in charge of protecting the finances of consumers has approved the rules on Aug.  4 that will serve to deter wrongful home foreclosures, as part of the regulator’s series of initiatives to move forward with improving the nation’s enormous lending industry.

The regulations set by the Consumer Financial Protection Bureau (CFPB), which was formed after the start of U.S. housing crash in 2006, are founded on existing rules that require a mortgage servicer to provide definite foreclosure protections to a delinquent borrower just once within the whole duration of the loan.

The updated rules require servicers to give those protections not just one time, granting them to borrowers who are paying current obligations after they have arranged a deal that would prevent foreclosure.

Upon giving the outline of the new guidelines, the CFPB said that the new rules are going to help borrowers who entered a permanent loan modification agreement and afterward experienced financial hardship because of, for example, job loss or the death of a loved one – that could put them at risk of foreclosure.

In addition, the new rules increase consumer protections to the family members of a decedent and obligate servicers to provide bankrupt borrowers useful information regarding interventions that they can avail.

They reinforce requirements associated to loss mitigation, which is an alternative to foreclosure that permits people remain in their homes and also pay a portion of their debt to lenders.

Upon completion of the applications for loss mitigation, servicers are required to notify borrowers at the appointed time.

The CFPB shared a report in June that showed some servicers are not providing proper information to homeowners.

On Aug. 3, the bureau said it was considering creating fresh debt relief programs and announced the ideology behind its work.

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