With millions of homeowners behind on their mortgage payments, and a looming foreclosure moratorium that expires July 31, the Consumer Financial Protection Bureau (CFPB) has added some new protections to help borrowers keep their homes. However, since lenders don’t always follow the rules, you’ll want to know what these new protections are so you can advocate for yourself.
Lenders must follow these steps if you’re behind on payments
To mitigate a cascade of foreclosures later this summer, the CFPB has established new rules for 120-day delinquent accounts. Effective from Aug. 31 through Dec. 31, a lender can’t proceed with foreclosure proceedings until one of these conditions are met:
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Furthermore, to speed up the process, the CFPB is allowing mortgage servicers to offer streamlined loan modifications, which don’t require borrowers to resubmit paperwork, as long as these loan modifications don’t increase a borrower’s payments.
Know your rights as a homeowner
With these rule changes, mortgage lenders are required to check whether you qualify for a lower interest rate or a different amortization schedule that makes it easier to repay. That said, some lenders haven’t been consistent in following special COVID-relief rules, so it’s best to know your rights as a homeowner rather than counting on your mortgage provider to tell you what they are.
If you already know that you can’t pay your mortgage once forbearance ends, contact your loan servicer now to discuss your options. For more on what those options might be, check out this Lifehacker post.
