Federal Banking Agencies Ease Certain Requirements to Facilitate Mortgage Service Forbearance Programs

The CFPB, Federal Reserve Board ("FRB"), FDIC, National Credit Union Administration ("NCUA") and OCC (collectively, the "Agencies") clarified their compliance expectations for mortgage servicers on consumer communication requirements during the pandemic.

In a joint statement, the Agencies said that they would implement a more "flexible" supervisory and enforcement approach regarding mortgage servicers' compliance with Federal Reserve System Regulation X ("Borrowers of Securities Credit") during the COVID-19 emergency. According to the Agencies, the flexible approach is intended to facilitate mortgage servicer offerings of short-term forbearance programs in accordance with the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). Specifically, the Agencies stated that, until further notice, they do not plan on taking enforcement action against a mortgage servicer for:

• failing to submit an acknowledgment notice within five days of the receipt of an incomplete application (provided such notice is sent before the end of the forbearance period, for a short-term forbearance or the end of the repayment period, for a short-term repayment plan);

• delays in (i) sending loss-mitigation-related notices (provided good-faith efforts are being made to provide these notices within a reasonable time), (ii) establishing or making good-faith efforts to establish live contact with delinquent borrowers or (iii) sending written early intervention notices to delinquent borrowers (provided good-faith efforts are being made to provide these notices within a reasonable time); or

• delays in sending the annual escrow statement (provided good-faith efforts are being made to provide such statement within a reasonable time).