As the COVID pandemic hit the shores of America in March 2020, Congress passed the CARES Act, which included a moratorium on foreclosures and evictions. Since that time, the Center for Disease Control (CDC) and the Government Sponsored Enterprises (GSE’s) have implemented a broad foreclosure and eviction moratorium, with limited exclusions such as vacant property foreclosures. In particular, the eviction moratorium has sparked much debate and litigation, which has resulted in some courts finding that the CDC has overstepped its authority by imposing such a moratorium. However, the moratorium was scheduled to end on June 30, 2021. The U.S. Supreme Court on June 30th upheld the CDC’s eviction moratorium through July 31, 2021 in order to provide sufficient time for distribution of certain emergency Federal funds earmarked to assist renters.
Industry experts predict that nearly 1.7 million loans will be at least 90 days delinquent come September 2021. In April, the Consumer Financial Protection Bureau (CFPB) proposed changes to Regulation X, intending to stem the potential tsunami of foreclosures as the moratorium is lifted.
The mortgage servicing industry lobbied the CFBP to consider certain exclusions to its amended rules, such as pre-pandemic defaults, borrowers who cannot demonstrate a financial hardship related to the pandemic, reverse mortgages, and unresponsive borrowers. With this guidance from the mortgage servicing industry, it is expected that the CFPB’s final rules will take into consideration some of these concerns in the final rules that are to be issued.
With the moratorium nearing its end, and the country beginning to return to a pre-pandemic routine, the CDC and GSE’s under pressure from the House Financial Services Committee, have announced that they will extend the foreclosure and eviction moratorium one last time through July 31, 2021, to permit the CFPB to finalize and implement its pandemic recovery mortgage servicing rules.
We will continue to monitor this evolving matter and provide updates, including the announcement of the CFPB amended mortgage servicing rules as they become available.
For more comprehensive information and insights, watch our Foreclosures & Loss Mitigation webinar.
This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
We will continue to monitor this evolving matter and provide updates, including the announcement of the CFPB amended mortgage servicing rules as they become available.
For more comprehensive information and insights, watch our Foreclosures & Loss Mitigation webinar.
This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
