Under the interim final rule, servicers will have more flexibility over when to provide information about foreclosure prevention options to borrowers who have requested a cease in communication under the Fair Debt Collection Practices Act. Meanwhile, the CFPB proposed a rule that would clarify timing rules related to periodic statements for consumers in connection with their bankruptcy case.
"Today’s action should make it easier for mortgage borrowers to receive timely information from their mortgage servicers about available options for saving their home, even if they have submitted a request to cease communication," CFPB Director Richard Cordray said. "In addition, we are proposing changes to clear up confusion about when to provide periodic statements with important loan information to borrowers in bankruptcy."
Both the interim final rule and proposed rule relate to amendments made by the CFPB in 2016 to mortgage servicing rules. Under the amendments, servicers are required to send delinquent borrowers notices about foreclosure prevention options every 45 days. However, servicers are prohibited from sending notice more than once in a 180-day period.
The interim final rule now gives servicers a longer, 10-day window to provide the modified notices. The CFPB said it believes the change continues to protect borrowers while providing servicers greater certainty to comply with the rule. The interim final rule becomes effective Oct. 19, the same date that the related 2016 rule provisions become effective.
The proposed rule responds to concerns that certain technical aspects of the 2016 amendments may create unintended challenges and be subject to different legal interpretations related to when servicers should provide periodic statements on borrower’s bankruptcy cases. The proposed effective date is April 19, 2018, the same date that the sections of the 2016 rule that the proposal would amend become effective.
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The Consumer Financial Protection Bureau has released an interim final rule and a proposed rule that seek to ease certain borrower communication requirements for mortgage servicers.