A new CFPB final rule effective August 31, 2021, amends RESPA Regulation X early intervention and loss mitigation requirements, found at 12 C.F.R. §§ 1024.39 and 1024.41. The amendments provide significant new rights to homeowners exiting a mortgage loan forbearance or experiencing a payment hardship related to the COVID-19 pandemic. See 86 Fed. Reg. 34,848 (June 30, 2021). For a redline version click here. The new rule:

  1. Requires servicers to comply with additional procedural safeguards before initiating foreclosure;
  2. Permits a servicer to offer certain streamlined loan modifications without requiring the borrower to submit a complete loss mitigation application;
  3. Specifies how and when a servicer must resume reasonable diligence efforts at the end of forbearance; and
  4. Imposes new early intervention requirements for borrowers in default.

More here…