CFPB’s Interim Final Rule | Mortgage Servicers’ Communication with Borrowers at Risk of Foreclosure

On October 4 the Consumer Financial Protection Bureau (CFPB) issued an interim final rule to give mortgage servicers more clarity surrounding communication restrictions and requirements when conveying information to borrowers. This rule, and a second proposed rule, modify previously standing mortgage servicing amendments from 2016.

Under the Fair Debt Collection Practices Act passed in 2016, mortgage servicers were required to send written early intervention notices to delinquent borrowers at intervals of 45 days, and to not duplicate notices within a 180-day period. The interim rule, which takes effect on October 19, gives servicers a 10-day window rather than an exact deadline to provide borrowers with modified notices. The CFPB hopes the rule will keep borrower protections in place while helping to increase industry-wide compliance.

According to CFPB Director Richard Cordray, “this action should make it easier for mortgage borrowers to receive timely information from their mortgage servicers about available options for saving their home, even if they have submitted a request to cease communication.”

The proposed rule deals with timing for servicers to provide periodic statements in connection with a borrower’s bankruptcy, and would take effect April 19, 2018. Both rules are now open for public comment. Click to give feedback on the interim final rule or the proposed rule.

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