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CFPB joins forces with others on database of financial companies found to prey on servicemembers.
January 25 -
The CFPB's Office of Servicemember Affairs is reaching out to the banking and mortgage industries, as well as to members of the military and their families, to help raise awareness about financial challenges — from foreclosures to payday loans — and products that work for them.
December 16 -
The Consumer Financial Protection Bureau is applauding the Treasury Department for guidance it issued Thursday that would help members of the military avoid foreclosure.
September 29
WASHINGTON — Regulators issued new guidance Thursday designed to provide relief for military homeowners who must move quickly to comply with orders.
Under the guidelines, military personnel will be eligible to sell their homes in a short sale if their mortgage is owned by Fannie Mae or Freddie Mac, even if they are current on their mortgage. The guidance is meant to protect service personnel, many of whom have felt pressure to default on their mortgages — hurting their credit scores in the process - when they must comply with a Permanent Change of Station, or PCS, order.
The guidance also details what other protections servicemembers are entitled to and requires servicers to provide timely information to military families on their rights.
"If you risk your life in Iraq and Afghanistan or anywhere else to protect the rest of us, you shouldn't have to endure the stress of losing your home because a mortgage servicer gives you the run around and does not tell you about the help that is available to you," said Richard Cordray, director of the Consumer Financial Protection Bureau, at a news conference. "This should not be the case and not if the federal government can help it and we can."
About 185,000 military families receive orders each year that require them to move and relocate to another military installation. These moves are often quick and create hardships for military homeowners who happen to be underwater on their mortgages.
Holly Petraeus, assistant director for the CFPB's Office of Servicemember Affairs, who has traveled to dozens of military bases and spoken to families, said service members often find out too late about available programs or end up being "strung along, given inaccurate information and kept in the dark as to the status of their case."
There is no estimate on how many military families who own homes are underwater, but officials said it could help tens of thousands of military personnel.
"Sadly the reality is the financial crisis, the crash of the financial system and the problems we see pervasive in the housing market, a larger number of those people are being affected very personally by this situation now then would be during normal times," said Cordray.
The guidance was issued by the Federal Housing Finance Agency, in conjunction with the CFPB and banking regulators, and is meant to send a signal to mortgage servicers to treat military homeowners that receive such orders fairly.
"Mortgage servicers should provide clear, timely, and accurate information for those who receive PCS orders. We want to make sure that are military are treated fairly and when they are not we will take appropriate actions," said Cordray.
To be eligible, the existing mortgage must be owned and guaranteed by Fannie or Freddie. The servicer member can either be current or delinquent on their mortgage to apply for a short sale. The property must also have been purchased on or before June 30. The guidance will be issued by FHFA by Sept. 30 and it will become effective 60 days later.
"These Fannie Mae and Freddie Mac policy changes, in combination with related guidance last fall, should now provide military homeowners with access to immediate and automatic full range of foreclosure alternatives," said Ed DeMarco, acting director of the FHFA.
In September, the Treasury Department updated guidance that would loosen standards for servicemembers to qualify for assistance through the Home Affordable Foreclosure Alternative program. If a member of the military is being relocated — known as a "permanent change of station" order — he or she can receive assistance through HAFA even if their income has not decreased.
