Bradley attorney Mike Gordon was quoted in Law360 on the CFPB's proposal package that includes a temporary moratorium on new foreclosures through the end of 2021. The proposed moratorium comes in light of an expected surge in borrowers exiting pandemic-related forbearances this fall and would prohibit mortgage servicers from initiating foreclosure proceedings until after Dec. 31. If finalized as written, the CFPB's proposed review period would go into effect in August and would be in addition to the standard requirement that servicers can't begin the foreclosure process until a mortgage is 120 days delinquent.
"The bureau is sending a clear message to the industry that they're going to be closely scrutinizing servicers' performance in the next couple of years and will expect strict compliance with existing rules as well as new pandemic-related requirements," said Gordon.
Gordon told Law360 that while Monday's rulemaking proposal does include provisions that show the agency is willing to provide flexibility for the industry in certain situations, the general thrust fits with a broader message of high expectations and a desire to prevent any widespread servicing problems caused by the unique circumstances of the pandemic.
"The bureau's focus is on protecting consumers during this challenging time, and they expect servicers to do an excellent job preparing for and responding to the various stages of this crisis," Gordon said. "The message from the bureau's new leadership seems to be that they're not going to have a lot of patience for mistakes."
The original article, "CFPB Pitches Servicing Regs To Blunt Pandemic Foreclosures," appeared in Law360 on April 5, 2021.