CFPB Amends Rules to Assist Homeowners Suffering COVID-19 Hardships

The CFPB adopted amendments to Regulation X ("Real Estate Settlement Procedures Act") to facilitate the review of foreclosure avoidance options available to mortgage borrowers impacted by the COVID-19 pandemic.

The adopted amendments include:

• temporary procedural safeguards intended to ensure that borrowers have a meaningful opportunity to be reviewed for loss mitigation before a servicer can make the first notice or filing required to initiate foreclosure;

• streamlined loan modification options for borrowers based on the evaluation of an incomplete loss mitigation application; and

• new early intervention obligations for borrowers that (i) are not in a forbearance program or (ii) are near the end of a forbearance program made available due to COVID-19-related hardships.

The final rule also defines COVID-19-related hardship as one due, directly or indirectly, to the national emergency declared in Proclamation 9994 of March 13, 2020.

The final rule goes into effect on August 31, 2021.