CFPB suggests mortgage servicers continue offering COVID-related relief in nonpandemic situations

In the process of releasing updated mortgage servicing examination procedures yesterday, the Consumer Financial Protection Bureau indicated that the streamlined loss mitigation options created to help servicers respond to COVID-19 should continue to be extended to those not experiencing COVID-related hardships, as long as the same loss mitigation options also are available to borrowers having a COVID-19-related difficulty.

“We understand these streamlined options have been very successful in keeping consumers in their homes and note that COVID-19 will continue to impact families, even beyond the national emergency,” Lorelei Salas, the CFPB’s assistant director for supervision policy and acting assistant director for supervision examinations, wrote in a blog post. Salas said the agency expects servicers to continuing using “all the tools at their disposal” including the “streamlined deferrals and modifications that meet the conditions of the CFPB’s COVID-19-related mortgage servicing rules” to keep consumers in their homes.

Other new sections of the updated exam manual direct examiners to review servicers practices related to charging fees for making payments (also known as convenience fees), changing existing credit arrangements, canceling private mortgage insurance, providing information about homeowners’ assistance programs, and representations made to borrowers prior to initiating foreclosure actions.

The mortgage servicing examination procedures describe the types of information that agency examiners gather to evaluate servicers’ policies and procedures; assess whether servicers are complying with applicable laws; and identify risks to consumers related to mortgage servicing. The document includes CFPB guidance released since the last update in 2016.