WASHINGTON — The Federal Housing Finance Agency is looking to coordinate its policies with the Consumer Financial Protection Bureau on how mortgage servicers should deal with delinquent borrowers nearing the end of their forbearance periods.
The FHFA has had conversations with the Biden administration and is currently working with the CFPB to develop an “exit strategy” for borrowers leaving forbearance in order to prevent a wave of foreclosures, FHFA Director Mark Calabria said Tuesday during a virtual conference held by the Mortgage Bankers Association.
“Our intent is to the extent practicable, not always, but to the extent practicable and to the extent that it makes sense, that we align our policies with the administration,” Calabria said.
The CFPB
The set of rule changes would institute a “special pre-foreclosure review period” that would generally block most servicers from initiating foreclosure proceedings until after Dec. 31. Servicers would also be able to offer simplified loan modification options to borrowers experiencing pandemic-related hardship.
The FHFA has extended its moratorium on foreclosures and real estate-owned evictions
“I do think that endless forbearance is not the right solution for borrowers or for the industry, so we'll be working with CFPB to offer our perspective on the right timeline,” Calabria said.
The CFPB asked for public feedback on whether the Dec. 31 expiration date for the special pre-foreclosure review period is appropriate, and whether there are other steps the agency could take. That could include allowing servicers to initiate foreclosure proceedings if the servicer has made certain steps to work with struggling borrowers.
“It's hard for us to plan until we see a finalized number and date from CFPB,” Calabria said. “But in terms of, are we going to be matching that date? I can't really say yet until I know what the final date is, but our hope is to try to come up with a date that we can all mirror and be consistent on.”
