Consumer Financial Protection Bureau Seeks Longer Bailout for Needy Homeowners

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Homeowners who defaulted on mortgages will soon be able to buy more time, the federal consumer surveillance agency reports CBS MoneyWatch.

Approximately 2 million homeowners months behind on payments on a home loan due to loss of income in coronavirus pandemic… A moratorium on foreclosures, passed by Congress last year, is keeping families in their homes despite delaying payments. The moratorium expires next week.

In the hopes of getting more time for homeowners, the Consumer Financial Protection Bureau is working on a new rule that will postpone many foreclosure scenarios for the foreseeable future. A bureau spokesman did not give details on the unfinished rule on Tuesday, but told CBS MoneyWatch that the agency expects to discuss a proposal involving mortgage service providers in the coming weeks.

Citing anonymous sources, Reuters reported On Tuesday, the bureau plans to pass a rule that further postpones certain types of foreclosures. However, the bureau representative said that the final result was still a rolling target.

“The CFPB is working on finalizing the proposal,” the spokesman said in a statement. “We continue to strive to work with both [mortgage] service providers and homeowners to prevent foreclosures as much as possible. Economic recovery risks leaving some communities behind and no one should lose their home without being able to explore their options. “

In April, CFPB representatives presented new regulations aimed at preventing “avoidable foreclosure” due to the pandemic. One of these rules was that mortgage services could not begin foreclosure proceedings until December 2021. The rule will only apply to the home that is the borrower’s primary residence. If approved, this rule will give homeowners the option to start paying until 2022.


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According to Reuters, bureau officials plan to adopt the rule by the end of August.

The new CFPB rule will exclude homeowners who are already in the process of entering into payment agreements with their mortgage service agent, homeowners who left their home without informing their mortgage service personnel, and homeowners who did not tell their mortgage service personnel whether they would stay. in my house. This was also reported by Reuters.

Regardless of the exceptions, the bureau’s decision could decide the housing fate of many Americans who are still struggling financially. Some 1.7 million homeowners will be excluded from public and private abstinence programs by September, according to mortgage industry data, and many of these homeowners will be delayed by a year or more by then, CFPB officials said in April.

Congress devotee $ 10 billion to help homeowners get paid, but it’s unclear if this funding will reach families before mortgage companies start sending out foreclosure notices. Housing advocates have pushed for President Joe Biden to sign an executive order extending the foreclosure moratorium, but there is no indication that an extension will happen.

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