The U.S. Department of Housing and Urban Development (HUD) recently issued a final rule extending the maximum term of an FHA loan modification from 30 to 40 years. The rule is effective May 8, 2023. HUD also issued Mortgagee Letter 2023-06 incorporating a 40-year standalone loan modification into FHA’s COVID-19 loss mitigation policies for situations in which partial claim funds are not available. … Continue Reading
CFPB and DOJ send joint letters to landlords and mortgage servicers on CARES Act and SCRA protections
On Monday, the CFPB and DOJ announced that they sent joint letters to landlords/property management companies and mortgage servicers regarding the protections given to servicemembers by the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Servicemembers Civil Relief Act (SCRA).
Letter to landlords/property management companies. The letter only addresses SCRA protections for early lease terminations and evictions. … Continue Reading
This week’s podcast: Preparing for the end of COVID-19-related hardship assistance programs
We look at the issues creditors and debt collectors should be considering in preparation for the surge in delinquencies that is expected to occur once consumers are required to fully resume making payments that had been suspended or reduced during the pandemic, including: operational and compliance considerations arising from increased delinquencies, likely sources of regulatory scrutiny, and potential compliance issues that could cause a regulator to initiate enforcement.… Continue Reading
D.C. emergency and temporary legislation limiting collection activities to take effect September 23, 2021
During D.C.’s declared State of Public Health Emergency, several financial protections have been put in place, including some that severely limit, among other things, collection activities relating to consumer contracts, repossession, and legal actions on accounts. On September 1, Mayor Muriel Bowser signed the most recent pair of emergency and temporary legislation to land on her desk, B24-0347 and B24-0348. … Continue Reading
FHFA, HUD, VA, and USDA extend eviction moratoria
The Centers for Disease Control and Prevention’s (CDC) eviction moratorium expired on July 31, 2021. Meanwhile, at President Biden’s request, the Acting Director of the Federal Housing Finance Agency, and the Secretaries of the U.S. Department of Agriculture (USDA), U.S. Department of Housing and Urban Development (HUD), U.S. Department of Treasury, and U.S.… Continue Reading
CFPB issues final COVID-19 mortgage servicing rules
On June 28, 2021, the CFPB issued its Mortgage Servicing COVID-19 Final Rule (the “Final Rule”). The Final Rule, which amends Regulation X, is effective August 31, 2021, and comes at the same time as certain related updates from other Federal agencies. We discuss those topics, along with an overview of the Final Rule, below.… Continue Reading
This week’s podcast: Protection of economic impact payments (EIPs) from garnishment by creditors: what are the issues now facing financial institutions?
With the U.S. Treasury Department now completing the process of issuing the third round of EIPs, financial institutions must navigate a maze of federal and state garnishment protections. After looking at the protection provided by the three federal pandemic relief laws, we discuss the actions states have taken to protect EIPs and offer our thoughts on the approach banks should take when responding to garnishment orders and analyzing the impact of state laws, executive orders, guidance, and directives.… Continue Reading
CFPB issues interim rule applicable to FDCPA debt collectors seeking to evict tenants for non-payment of rent
The CFPB has issued an interim final rule that requires “debt collectors” as defined under the FDCPA who seek to evict tenants for non-payment of rent to provide written notice to tenants of their rights under the Centers for Disease Control and Prevention (CDC) Order that establishes an eviction moratorium. The interim rule also prohibits FDCPA debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium. … Continue Reading
Protection of federal stimulus payments from creditors
In the federal government’s ongoing effort to revive the U.S. economy and help people harmed by the economic damage wrought by the coronavirus pandemic, an important detail has gone under-noticed: the most recent set of federal stimulus payments to individuals are subject to garnishment by creditors. And this fact is creating legal and operational challenges for the banking industry.… Continue Reading
CFPB issues series of measures impacting mortgage servicers
The CFPB was busy last week, issuing a series of measures that impact the mortgage servicing industry.
- On March 31st, the CFPB rescinded seven policy statements, including statements that provided flexibility from supervisory or enforcement actions for loss mitigation and credit reporting activity in connection with the COVID-19 national emergency.