On Monday, June 28, 2021, the Centers for Disease Control and Prevention (CDC) issued final amendments to the Federal mortgage servicing rules. Pursuant to the Consumer Financial Protection Bureau (CFPB), these amendments are designed to facilitate a smooth transition in the housing market and mortgage servicing industry as federal foreclosure protection is scheduled to expire on July 31, 2021.
The amendments take effect on August 31, 2021, and cover loans on principal residences. The changes generally exclude small servicers, so many credit unions will be exempt. These amendments have sunset provisions or expirations, with some expiring on January 1, 2022, and others expiring on October 1, 2022.
The rule will require services to increase their efforts to reach borrowers and work with those borrowers to avoid foreclosure. The rule will allow foreclosures to start if: (1) the borrower has abandoned the property; (2) the borrower was more than 120 days behind on their mortgage before March 1, 2020 (and they are still behind by at least 120 days); (3) the borrower is more than 120 days behind on their mortgage and has not responded to specific required outreach from the mortgage servicer for 90 days; or (4) the borrower has been evaluated for all options other than foreclosure and there are no available options to avoid foreclosure.
For those attending the SVL SourcExpo (July 21st through July 23rd), we will cover these amendments in more detail. Information on the SVL SourcExpo can be found here: https://svllaw.com/sourcexpo-2021/
Additionally, on Tuesday, June 29, 2021, the United States Supreme Court voted 5 to 4 to keep in place the CDC eviction moratorium. That means that legal attempts to stop the eviction moratorium have failed, as the CDC has indicated that it will not extend the moratorium past July 31, 2021.
Should you have questions about the amendments to the mortgage servicing rules or the CDC eviction moratorium, please reach out to a lawyer at SVL.
