The Consumer Financial Protection Bureau, CFPB, has developed new rules that will take effect on January 10, 2014. These rules are designed to help people who are struggling with their mortgages. Under the new regulations, if a borrower is having problems paying the mortgage, his or her mortgage servicer is required to tell him or her about any and all programs available to assist him or her to avoid foreclosure. However, before giving the borrower this information, the servicer may require that the borrower complete an application.
Once the application is completed and sent to the servicer, the servicer is required to review it. While it is under review, the lender may not foreclose on the property. Once the review is complete the servicer is required to let the borrower know all programs available, including reducing the monthly payment, lowering the interest rate or entering into a temporary forbearance agreement. If a borrower believes the mortgage servicer is giving him or her the run around, he or she can file a complaint with the CFPB by going on its web site: consumerfinance.gov/complaint or by calling (855) 411-2372. A review of the summary of the new procedures to facilitate borrowers’ access to foreclosure avoidance options can be found at http://filesconsumerfinance.gov/f/201312_foreclosure-avoidance-procedures.pdf.
The time to call the servicer is when the borrower first realizes that her or she may miss a payment or has just missed a payment. The sooner the borrower contacts the servicer the more likely it is that the servicer will have a program to assist him or her. There are plenty of scam artists who are praying on vulnerable home owners with promises of help, but who actually offer no assistance. If the borrower believes he or she needs assistance during this process, he or she should go to a reliable attorney or housing counselor with a proven track record.
Laura J. Margulies is a principal in the firm of Laura Margulies & Associates, LLC. We represent consumers in bankruptcy and litigation matters in Maryland and the District of Columbia. To learn more about our firm visit our web site at www.law-margulies.com