Blog Post

Additional Servicing Protections for Borrowers Affected by the COVID-19 Pandemic

Michael Christians • August 2, 2021

The Consumer Financial Protection Bureau (CFPB) has issued a final rule amending a number of the servicing provisions found in Regulation X to provide additional relief for borrowers impacted by the COVID-19 pandemic. These changes take effect on August 31, 2021.

Early Intervention Requirements

Creditors must now provide additional information to delinquent borrowers during their live contact as required under RESPA’s early intervention requirements. If the borrower is not currently in a forbearance program at the time of live contact, the creditor must:

· Inform the borrower that forbearance programs are available for those experiencing a COVID-19 related financial hardship

· Briefly describe the programs that are available; and

· Inform the borrower as to how he/she can find contact information for homeownership counseling services

If the borrower is already in a forbearance program at the time of live contact, the creditor must:

· Identify when the borrower’s current forbearance program will end

· Provide a list of additional loss mitigation options that may be available to the borrower at that time; and

· Inform the borrower as to how he/she can find contact information for homeownership counseling services

Loss Mitigation: Temporary Foreclosure Procedural Safeguards

Through at least the end of 2021, before referring a 120+ day delinquent account for foreclosure, a creditor must ensure at least one of the following additional procedural safeguards has been met:

· The borrower was evaluated for loss mitigation assistance based on his/her submission of a complete application

· The property securing the mortgage loan has been abandoned

· The borrower has been unresponsive (for at least 90 days) to the creditor’s outreach

Loss Mitigation: Streamlined Loan Modifications

A creditor may provide a loan modification based on the borrower’s submission of an incomplete application for loss mitigation assistance so long as:

· The modification does not extend the borrower’s loan term for more than 40 years

· The modification does not increase the borrower’s principal and interest payment

· Interest does not accrue on any amount for which repayment is delayed

· The streamlined modification is available to any borrower facing a COVID-19 related financial hardship

· The modification ends any pre-existing delinquency; and

· The borrower is not charged a fee to participate in the modification

Loss Mitigation: Reasonable Due Diligence

For borrowers currently participating in a short-term forbearance program, not later than 30 days before the scheduled end date of the forbearance program, a creditor must contact the borrower to determine whether he/she plans to submit a complete application for loss mitigation assistance.

< Older Post Newer Post >

Share this post

Recent Blog Posts

NCUA Outlines Changes to Exam Scheduling Policy

By Michael Christians • February 12, 2025

In Letter to Credit Unions 25-CU-03 , the National Credit Union Administration (NCUA) announced its new exam scheduling policy. Effective January 1, 2025, federally insured credit unions (FICUs) will be examined according to the following schedule: 8 to 12 months following its last examination date FICUs with ANY of the following characteristics - A CAMELS rating of 3, 4, or 5, Considered less than well capitalized, An outstanding enforcement action, or Assets greater than or equal to $10 billion. FICUs with assets between $1 billion and $10 billion, and A CAMELS rating of 3, 4, or 5, or A change in CEO since its last examination. 12 to 16 months following its last examination date FICUs with assets between $1 billion and $10 billion, and A CAMELS rating of 1 or 2, and No change in CEO since its last examination. 14 to 18 months following its last examination date Federal credit unions (FCUs) not included above Once every 5 years Federally insured state-chartered credit unions (FISCUs) not included above The NCUA believes this revised schedule will allow it to better respond to emerging risks and priorities using available resources. It is important to note that nothing in the new schedule limits the NCUA's authority to examine any FICU as frequently as the agency deems necessary.

Eleventh Circuit Vacates New TCPA Prior Express Written Consent Requirements

By Michael Christians • January 29, 2025

Back in December 2023, the Federal Communications Commission (FCC) adopted a new rule amending the prior express written consent requirements under the Telephone Consumer Protection Act (TCPA). That rulemaking would have done a couple of things. First, it would have clarified that a consumer’s prior express written consent can apply to not more than one seller. In other words, the rule would have prevented a company from obtaining a consumer’s consent to the receipt of advertising and telemarketing messages both for itself as well as its affiliates. Second, the rule would have required that a consumer’s consent be logically and topically associated with the interaction that prompted the consent. That second requirement was particularly concerning for financial institutions. The language of the rulemaking seemed to suggest that an institution that captured prior express written consent at the time of account opening could not later rely on that same consent for purposes of sending advertising or telemarketing messages related to loans, credit cards, or other non-deposit products. The Insurance Marketing Coalition asked for a judicial review of the rulemaking at the Eleventh Circuit Court of Appeals. On January 24, 2025, that court vacated the new requirements. In its order, the court found that the FCC exceeded its statutory authority because the amendments to the definition of prior express written consent impermissibly conflicted with the statutory definition of the same term under the TCPA.

CFPB Reminds Institutions Payday Lending Rule Takes Effect March 30th

By Michael Christians • January 25, 2025

Following years of litigation, the Consumer Financial Protection Bureau’s 2017 payday lending rule will take effect on March 30, 2025. Three types of consumer loans are covered by the payday lending rule: Short-term loans that require repayment within 45 days, Longer term loans with a balloon payment, and Longer term loans for which the APR exceeds 36% and automatic payment is required from the consumer's account. Under the rule, covered lenders will have to adhere to both payment restrictions and notice requirements. First, when two consecutive automatic payment attempts have failed in connection with a covered loan, the lender is prohibited from attempting another withdrawal until it has obtained a new and specific authorization from the consumer. Second, the rule imposes the following notice requirements in connection with a covered loan: Written notice before the lender attempts to withdraw the first automatic payment from the consumer's account, Written notice before a subsequent automatic payment attempt that will differ in amount or effective date, and Written notice when two consecutive payment attempts have failed. Lenders that do not originate more than 2,500 covered loans in a calendar year are exempt from the rule’s requirements. Additional implementation resources regarding the payday lending rule are available from the CFPB here .

Address

5438 South Prairie View Drive

West Des Moines, IA 50266

Phone

319-325-1171

Email

michael@mchristiansconsulting.com

Sitemap

Michael Christians Consulting, LLC

This website has been built to be accessible for all users. If you experience any difficulty in accessing this website, please contact us for assistance.

Client Login