Does CFPB have authority to postpone foreclosures?
The Consumer Financial Protection Bureau released a proposed rule on Monday that would bar servicers from starting on foreclosures until 2022. The CFPB also proposed streamlined processes for moving homeowners out of forbearance and into loss mitigation options. However, since the announcement, several industry leaders have expressed reservations about the blanket policy.
“My concern is that the bureau is overstepping its bounds and violating in essence agreements that have already been previously made,” said Dave Stevens, chief executive officer of Mountain Lake Consulting and former CEO of the Mortgage Bankers Association.
According to the CFPB, streamlining the process would allow servicers to get homeowners into less burdensome payments at a much quicker pace. But data shows that servicers are already serving borrowers well.
Does CFPB have authority to postpone foreclosures?
At the peak of forbearance, nearly 6 million borrowers were in some form of forbearance, but over half of those homeowners have since exited. According to MBA data, close to 86% of those who have exited did so with some sort of plan in place or they simply continued making their payments while they were in forbearance.
“I think the math speaks for itself how well the forbearance program has worked, and it’s one of the few times in my career that I have seen a government-initiated program adopted as well and executed as well by the industry as this one,” said Rick Sharga, executive vice president of RealtyTrac.Read More »Does CFPB have authority to postpone foreclosures?