Standard News

Hide Advertisement
  • Business
  • Culture
  • News
  • Technology
  • Trending
Site logo
ADVERTISEMENT
ADVERTISEMENT

New U.S. mortgage rules aim to stop wrongful foreclosures

By Reuters 2 min read
A lock secures a chain on the steel fence of a foreclosed home previously owned by U.S. Bancorp in Los Angeles

WASHINGTON (Reuters) – The U.S. agency charged with protecting consumers’ finances approved rules on Thursday that will help prevent wrongful home foreclosures, as the regulator continues to press on with reforming the country’s massive lending market.

The rules by the Consumer Financial Protection Bureau (CFPB), created in the aftermath of the U.S. housing bust that began in 2006, build on current regulations requiring a mortgage servicer to grant certain foreclosure protections to a struggling borrower once over the life of the loan.

Advertisement

Now, servicers, the conduits for mortgage payments, must provide those protections more than once, offering them to borrowers who make current payments after they have worked out an agreement to avoid foreclosure.

“This change will be particularly helpful for borrowers who obtain a permanent loan modification and later suffer an unrelated hardship – such as the loss of a job or the death of a family member – that could otherwise cause them to face foreclosure,” the CFPB said in an outline of the new rules.

The rules also expand consumer protections to surviving family members and require servicers to give borrowers in bankruptcy information about possible interventions.

They bolster requirements related to loss mitigation, a foreclosure alternative that allows people to stay in their homes and pay some money to lenders, as well.

Servicers will have to promptly notify borrowers when loss mitigation applications are complete, and will not be able to “dual track,” where they take legal steps toward foreclosure at the same time they evaluate the applications.

“The Consumer Bureau is committed to ensuring that homeowners and struggling borrowers are treated fairly by mortgage servicers and that no one is wrongly foreclosed upon,” CFPB Director Richard Cordray said in a statement.

In a June report, the CFPB showed some servicers are giving homeowners wrong or outdated information, or no information at all.

When mortgage defaults spiked during the 2007-09 financial crisis, servicers came under intense scrutiny for missing paperwork, incomplete documentation, and “robosigning,” where employees signed off on foreclosures without review.

A crisis-era Treasury program that allows struggling borrowers to reduce their monthly payments and prevent foreclosure will expire in January.

On Tuesday, the CFPB said it was looking into crafting new debt relief programs and released the principles guiding its work, which emphasized giving consumers easy access to information about loss mitigation and the decisions servicers make on their loans and creating repayment plans and loan modifications that are affordable.

(Reporting by Lisa Lambert)

tagreuters.com2016binary_LYNXNPEC7318O-VIEWIMAGE

Advertisement - Continue reading below

Veteran Arizona sheriff faces off against three in Republican primary
News
Reuters 2 min read

Veteran Arizona sheriff faces off against three in Republican primary

U.S. considering speed-limit device rule for trucks, buses
News
Reuters 2 min read

U.S. considering speed-limit device rule for trucks, buses

New York attorney general says fake Zika protection claims swiftly dropped
News
Reuters 2 min read

New York attorney general says fake Zika protection claims swiftly dropped

‘I’m fine’ singer Newman says after brain tumor returns
Entertainment
Reuters 2 min read

‘I’m fine’ singer Newman says after brain tumor returns

Bloomberg looks West after bankrolling Philadelphia soda tax win
News
Reuters 3 min read

Bloomberg looks West after bankrolling Philadelphia soda tax win

SEC’s Miami win likely to embolden muni crackdown: lawyers
News
Reuters 3 min read

SEC’s Miami win likely to embolden muni crackdown: lawyers

Villeneuve says creating alien world in new sci-fi movie was ‘nightmare’
Entertainment
Reuters 2 min read

Villeneuve says creating alien world in new sci-fi movie was ‘nightmare’

Stock promoter pleads guilty in U.S. to $250 million scheme
News
Reuters 2 min read

Stock promoter pleads guilty in U.S. to $250 million scheme

New urgency for Cleveland security after France truck attack
News
Reuters 2 min read

New urgency for Cleveland security after France truck attack

North Carolina lawmaker dismisses U.S. deadline to change bathroom law
News
Reuters 3 min read

North Carolina lawmaker dismisses U.S. deadline to change bathroom law

load more Loading posts...

sidebar

ADVERTISEMENT
ADVERTISEMENT

sidebar-alt

  • About Us
  • Imprint
  • Contact Us
  • Terms of Service
  • Privacy Policy