The CFPB And Conference of State Bank Supervisors Warn Mortgage Servicers To Adhere To The CARES Act For The 3rd Time
Government agencies have issued a third warning to mortgage servicers to adhere to the CARES Act. The CFPB and the Conference of State Bank Supervisors have sent their third warning to mortgage servicers. The Act includes provisions granting a right to forbearance to mortgaged homeowners impacted by the COVID-19 pandemic.
Servicers of Fannie Mae and Freddie Mac must grant forbearance to borrowers with pandemic-related hardships for as long as two consecutive 180-day periods. This law also applies to FHA, VA, and USDA loans.
CFPB and the CSBS say servicers can approve a shorter than 180-day plan. However, only at the borrower’s request and acceptance.
Mortgage Servicers must grant forbearance to all borrowers who request it. Homeowners must also provide the servicer with attestation to a financial hardship caused by the emergency.
Servicers who fail to grant forbearance or steer borrowers away from forbearance are in violation of the Act.
The CFPB warned servicers they are barred from charging any additional interest or fees. In addition, servers are also barred from negatively reporting forbearance arrangements to credit agencies.
Agencies will evaluate communications between borrowers and their servicers. This includes the servicer’s communication of repayment options for legal compliance or resulting in consumer harm.
Loan originators are also subject to CARES Act provisions. They must be careful about any closing attestations, notices, or other communications that might discourage borrowers from seeking forbearance.
The full document provides a list of these and is available at https://files.consumerfinance.
Federal Agencies Have Warned Mortgage Servicers Multiple Times:
CORONAVIRUS MORTGAGE FORBEARANCE WARNING!
COVID-19 Mortgage Forbearance Alert: Mortgage Servicers Busted Again!
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