Here’s what the Biden administration’s new mortgage service rules mean for you.

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The CFPB and FHFA have introduced new mortgage service rules to help homeowners struggling to make their mortgage payment. (iStock)

The Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Administration (FHFA) issued new mortgage servicing rules in late June that put in place rules designed to help homeowners who are still struggling to pay off their mortgages due to COVID. … -nineteen.

The CFPB rule was issued as an amendment to the Law on Truth in Credit and the Law on the Procedure for Settlements with Immovable Property, a rule that protects homeowners and borrowers from predatory lending practices. This rule will take effect on August 31, 2021.

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Just a day after the amendment was released, FHFA announced that it would prohibit government-funded mortgage companies Fannie Mae and Freddie Mac from filing most of the initial foreclosure applications prior to the CFPB rule taking effect.

If you’re struggling to make your mortgage payments, refinancing can also be a good option, helping you secure a lower interest rate and lower monthly payments. Visit Credible to see your personal rating from several mortgage lenders at once.

HOW FHFA EXTENSES THE MORATORIUM TO CLOSE FOR A FINAL TIME, WHAT THE HOUSE CHOICE FIGHTS CAN DO

What does the new CFPB rule do?

Under the new CFPB Rule, Early Intervention and Loss Mitigation Requirements for Mortgage Service Providers. In simple terms, the rule sets out precautions to help borrowers who are at risk of losing their homes to foreclosures due to the coronavirus pandemic, and helps negotiate a loss mitigation agreement or repayment plan that suits them.

Under the new rule, mortgage services cannot offer a loan modification plan that will increase the monthly payment of a homeowner exiting their abstinence program, and cannot extend the loan term by more than 480 months. The rule will also allow mortgage service providers to eliminate missed payments before the end of the mortgage loan so that homeowners do not become delinquent.

If you missed your mortgage payments due to COVID-19 difficulties, you can still qualify for mortgage refinancing. Visit Credible to view multiple lenders and pre-qualify without affecting your credit score.

“The ways that service personnel may have dealt with reducing losses in the past, including resource allocation and communication methods used, may not be as effective in these unprecedented circumstances.” CFPB said

If you’re struggling to make your mortgage payments after your loan withholding period ends, you may not have to face commissions, fines, or even bankruptcy. Visit Credible to see the refinancing options available to you… As home prices rise, more homeowners can benefit from refinancing their mortgages and lowering monthly payments.

RESIDENTS WITH PREVIOUS ORIGIN ON COVID MORTGAGES CAN APPLY QUALIFICATION FOR LOW INCOME REFINANCING – HERE AS

FHFA restrictions are what they mean

Since the CFPB’s final rule-making will not take effect until the end of August, the FHFA has issued its own rule. They prevent some creditors from starting the foreclosure or foreclosure process before the new rule takes effect.

FHFA announced that service companies cannot initiate first foreclosure notice for mortgages secured by Fannie Mae and Freddie Mac. This rule does not apply to abandoned properties or those for which an application for alienation of property was filed before March 2020. After the moratorium on foreclosures expires on July 31, 2021, GSEs will basically have to follow the new CFPB rule a month before it takes effect due to the FHFA rule.

“The COVID-19 pandemic has created many financial problems for families,” FHFA Acting Director Sandra Thompson said:… “Through no fault of their own, many of these families had to rely on abstinence from COVID-19 to stay safe in their homes during the pandemic. Today, many families’ finances are improving, allowing them to give up abstinence. place today will protect vulnerable families as they begin their financial recovery from the impact of the COVID-19 pandemic. “

THIS IS WHY YOU SHOULD (OR SHOULD NOT) REFUND YOUR MORTGAGE

While the Biden administration is actively developing policies that it says will help homeowners, those decisions are not permanent. Borrowers will still need to take action to start making mortgage payments after their abstinence options expire. You can work to get back on track with your mortgage by changing the loan, paying off missed payments, or even refinancing. Contact Credible for your options. and speak with a home loan specialist who will answer all your questions.

Have a financial question but don’t know who to contact? Write to the Safe Money Specialist at moneyexpert@credible.com and your question can be answered by Credible in our Money Expert column.



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