On May 16, the CFPB published a Federal Register notice withdrawing its COVID-19-era mortgage servicing protections for borrowers. The CFPB identified two reasons for rescinding this measure: first, the rule was intended to provide only temporary safeguards related to mortgage foreclosures and loan modifications for borrowers experiencing COVID-19 hardships, noting these protections had already sunset by their terms; and second, the CFPB determined that maintaining the regulations would complicate RESPA’s Regulation X without providing commensurate benefits. The interim final rule becomes effective July 15, with public comments due by June 16.
As previously covered by this Orrick Insight, the CFPB had previously issued a proposal in April 2021 that would broadly halt foreclosures on residences from August 31, 2021, until 2022, and change servicing rules to promote consumer awareness and processing of COVID-relief loss mitigation options. The FHFA announced the CFPB’s final rule in June 2021 (covered here).
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