We discuss various issues faced by lenders and servicers when attempting to foreclose on “zombie” mortgages, meaning second mortgages on which the borrower has not made a payment for a considerable period of time and the lender or servicer has not previously taken action to foreclose. First, we look at the CFPB’s May 2023 advisory guidance on the enforcement of time-barred mortgage loans. … Continue Reading
zombie
CFPB takes aim at sniping zombie mortgage loans
By Elliot Johnson on
The Consumer Financial Protection Bureau (“CFPB”) recently issued advisory guidance on the enforcement of time-barred mortgage loans. A time-barred mortgage loan is one where the statute of limitations has expired. The statute of limitations for mortgage loans are typically created by state law, and vary by jurisdiction. In some cases, they create an affirmative defense for the consumer that prohibits a debt collector from suing to collect the debt. … Continue Reading
CFPB to hold field hearing on “zombie second mortgages”
By Michael Gordon on
On April 26, 2023, the CFPB will hold a field hearing in Brooklyn, New York on “zombie second mortgages.” At the event, Director Chopra will host a discussion with local community organizations, advocates, leaders, and members of the public about such mortgages and debt collection issues. The CFPB describes “zombie second mortgages” as “debts that consumers thought were satisfied long ago by loan modifications or bankruptcy proceedings or that were written off by lenders as uncollectable.”… Continue Reading