On June 15, 2023, the CFPB published a blog post authored by CFPB Director Rohit Chopra that talks about the Bureau’s intention to identify ways to simplify and streamline the existing mortgage servicing rules. According to Chopra, the CFPB will be using inputs from commenters to propose ways to simplify and streamline mortgage servicing rules.
In 2022, the CFPB requested input from the public on ways to reduce risks for borrowers who experience disruptions in their ability to make mortgage payments. Specifically, the Bureau sought input on the features of pandemic-related forbearance programs and whether there are ways to automate and streamline long-term loss mitigation assistance. Responses showed that one of the challenges the borrowers face is the paperwork treadmill that hurts both the homeowner and the mortgage servicer. In addition, commenters expressed concern that borrowers often incur servicing fees and experience negative credit reporting while waiting for their mortgage servicers to review their options.
The CFPB believes that borrowers, servicers, and the economy benefit when homeowners who struggle to make payments receive the help they need without unnecessary delay. Thus, the CFPB will propose streamlining only if it would promote greater agility on the part of mortgage servicers in responding to future economic shocks while also continuing to ensure they meet their obligations for assisting borrowers promptly and fairly.
Read the blog post here.
