Among the CFPB’s mortgage rule amendments finalized last week were several changes related to servicing.
The changes clarify what foreclosure-related activities and communications are prohibited during the first 120 days of delinquency, allow servicers to provide troubled borrowers with short-term forbearance of up to six months based on an incomplete loss mitigation application, and establish procedures for servicers to follow if they later find that a loss mitigation application needs further information. ABA generally considers these changes to be positive for the industry.
Last week’s amendments also revise the test for qualifying as a “small creditor” for purposes of the requirement to maintain escrow accounts for higher-priced mortgage loans. To qualify for the exemption, a bank must have extended more than 50% of its covered transactions on properties located in “rural” or “underserved” counties for the preceding 3 calendar years. The $2 billion asset cap will continue to apply.
Read the final rule.