Streamlining Mortgage Servicing for Borrowers Experiencing Payment Difficulties; Regulation X

CONSUMER FINANCIAL PROTECTION BUREAU <CFR>12 CFR Part 1024</CFR> <DEPDOC>[Docket No. CFPB-2024-0024]</DEPDOC> <RIN>RIN 3170-AB04</RIN> <SUBJECT>Streamlining Mortgage Servicing for Borrowers Experiencing Payment Difficulties; Regulation X</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Consumer Financial Protection Bureau. <HD SOURCE="HED">ACTION:</HD> Proposed rule; request for public comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Consumer Financial Protection Bureau (Bureau or CFPB) is proposing a rule that would amend regulations originally issued in 2013 regarding the responsibilities of mortgage servicers. The proposed amendments would streamline existing requirements when borrowers seek payment assistance in times of distress, add safeguards when borrowers seek help, and revise existing requirements with respect to borrower assistance. The proposed rule would also require servicers to provide certain communications in languages other than English, such as when a borrower is seeking payment assistance with their mortgage. The proposed rule, if finalized, would increase the likelihood that investors and borrowers can avert the costs of avoidable foreclosure. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before September 9, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit comments, identified by Docket No. CFPB-2024-0024 or RIN 3170-AB04, by any of the following methods: • <E T="03">Federal Rulemaking Portal: https://www.regulations.gov.</E> Follow the instructions for submitting comments. A brief summary of this document will be available at <E T="03">https://www.regulations.gov/docket/CFPB-2024-0024.</E> • <E T="03">Email: 2024-NPRM-MortgageServicing@cfpb.gov.</E> Include Docket No. CFPB-2024-0024 or RIN 3170-AB04 in the subject line of the message. • <E T="03">Mail/Hand Delivery/Courier:</E> Comment Intake—Mortgage Servicing, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552. <E T="03">Instructions:</E> The CFPB encourages the early submission of comments. All submissions should include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. Because paper mail is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to <E T="03">https://www.regulations.gov.</E> All submissions, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Proprietary information or sensitive personal information, such as account numbers or Social Security numbers, or names of other individuals, should not be included. Submissions will not be edited to remove any identifying or contact information. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> George Karithanom, Regulatory Implementation and Guidance Program Analyst, Office of Regulations, at 202-435-7700 or <E T="03">https://reginquiries.consumerfinance.gov/.</E> If you require this document in an alternative electronic format, please contact <E T="03">CFPB_Accessibility@cfpb.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Summary</FP> <FP SOURCE="FP1-2">A. Goals of the Rulemaking</FP> <FP SOURCE="FP1-2">B. Key Changes</FP> <FP SOURCE="FP-2">II. Background</FP> <FP SOURCE="FP1-2">A. Mortgage Servicing During the Foreclosure Crisis</FP> <FP SOURCE="FP1-2">B. Early Standardization Efforts</FP> <FP SOURCE="FP1-2">C. CFPB's 2013 Mortgage Servicing Final Rule Aimed To Address the Challenges Previously Observed Prior to and During the Foreclosure Crisis</FP> <FP SOURCE="FP1-2">D. Streamlined Modifications and Other Borrower Protections Emerge</FP> <FP SOURCE="FP1-2">E. Loss Mitigation During the COVID-19 Pandemic</FP> <FP SOURCE="FP1-2">F. Amendments to the Mortgage Servicing Rules</FP> <FP SOURCE="FP-2">III. Legal Authority</FP> <FP SOURCE="FP1-2">A. RESPA</FP> <FP SOURCE="FP1-2">B. Dodd-Frank Act</FP> <FP SOURCE="FP-2">IV. Discussion of the Proposed Rule</FP> <FP SOURCE="FP1-2">A. Foreclosure Procedural Safeguards (§ 1024.41)</FP> <FP SOURCE="FP1-2">B. Changes to Early Intervention Requirements (§ 1024.39)</FP> <FP SOURCE="FP1-2">C. Loss Mitigation Determinations—Covered Errors and Appeals Process (§§ 1024.35 and 1024.41)</FP> <FP SOURCE="FP1-2">D. Language Access</FP> <FP SOURCE="FP1-2">E. Credit Reporting Protections for Borrowers Undergoing Loss Mitigation Review</FP> <FP SOURCE="FP1-2">F. Record Retention (§ 1024.38)</FP> <FP SOURCE="FP1-2">G. Removal of Regulations Implemented in Response to the COVID-19 Pandemic</FP> <FP SOURCE="FP1-2">H. Other Conforming Changes</FP> <FP SOURCE="FP1-2">I. Other Servicing Issues-Requests for Comment</FP> <FP SOURCE="FP-2">V. Proposed Effective and Compliance Dates</FP> <FP SOURCE="FP-2">VI. CFPA Section 1022(b) Analysis</FP> <FP SOURCE="FP1-2">A. Data Limitations and Quantification of Benefits, Costs, and Impacts</FP> <FP SOURCE="FP1-2">B. Small Servicer Exemption</FP> <FP SOURCE="FP1-2">C. Baseline for Analysis</FP> <FP SOURCE="FP1-2">D. Potential Benefits and Costs to Consumers and Covered Persons of the Proposed Rule</FP> <FP SOURCE="FP1-2">E. Potential Specific Impacts of the Proposed Rule on Insured Depository Institutions and Credit Unions with $10 Billion or Less in Total Assets, As Described in CFPA Section 1026</FP> <FP SOURCE="FP1-2">F. Potential Specific Impacts of the Proposed Rule on Consumer Access to Credit</FP> <FP SOURCE="FP1-2">G. Potential Specific Impacts of the Proposed Rule on Consumers in Rural Areas</FP> <FP SOURCE="FP-2">VII. Regulatory Flexibility Act Analysis</FP> <FP SOURCE="FP1-2">A. Application of the Proposed Rule to Small Entities</FP> <FP SOURCE="FP1-2">B. Certification</FP> <FP SOURCE="FP-2">VIII. Paperwork Reduction Act</FP> <FP SOURCE="FP-2">IX. Request for Comments</FP> <FP SOURCE="FP-2">X. Severability</FP> </EXTRACT> <HD SOURCE="HD1">Abbreviations and Acronyms</HD> The following abbreviations and acronyms are used in this proposed rule: <EXTRACT> <FP SOURCE="FP-2">ACS = American Community Survey</FP> <FP SOURCE="FP-2">AFR = Americans for Financial Reform</FP> <FP SOURCE="FP-2">ASMB = American Survey of Mortgage Bankers</FP> <FP SOURCE="FP-2">CARES Act = Coronavirus Aid, Relief, and Economic Security Act</FP> <FP SOURCE="FP-2">CDIA = Consumer Data Industry Association</FP> <FP SOURCE="FP-2">CFPA = Consumer Financial Protection Act</FP> <FP SOURCE="FP-2">CFPB = Consumer Financial Protection Bureau</FP> <FP SOURCE="FP-2">CPI-U = Consumer Price Index for All Urban Consumers</FP> <FP SOURCE="FP-2">CRA = Credit Reporting Agency</FP> <FP SOURCE="FP-2">DI = Depository Institution</FP> <FP SOURCE="FP-2">FAQ = Frequently Asked Question</FP> <FP SOURCE="FP-2">FHA = Federal Housing Administration</FP> <FP SOURCE="FP-2">FHFA = Federal Housing Finance Agency</FP> <FP SOURCE="FP-2">FRFA = Final Regulatory Flexibility Analysis</FP> <FP SOURCE="FP-2">FSOC = Financial Stability Oversight Committee</FP> <FP SOURCE="FP-2">GSE = Government-Sponsored Enterprise</FP> <FP SOURCE="FP-2">HAMP = Home Affordable Modification Program</FP> <FP SOURCE="FP-2">HHS = United States Department of Health and Human Services</FP> <FP SOURCE="FP-2">HUD = United States Department of Housing and Urban Development</FP> <FP SOURCE="FP-2">ICE = Intercontinental Exchange, Inc.</FP> <FP SOURCE="FP-2">ICR = Information Collection Request</FP> <FP SOURCE="FP-2">IRFA = Initial Regulatory Flexibility Analysis</FP> <FP SOURCE="FP-2">MBA = Mortgage Bankers Association</FP> <FP SOURCE="FP-2">MHA = Making Home Affordable</FP> <FP SOURCE="FP-2">NAICS = North American Industry Classification System</FP> <FP SOURCE="FP-2">NCLC = National Consumer Law Center</FP> <FP SOURCE="FP-2">NMDB = National Mortgage Database Program</FP> <FP SOURCE="FP-2">Non-DI = Non-Depository Institution</FP> <FP SOURCE="FP-2">OCC = Office of the Comptroller of the Currency</FP> <FP SOURCE="FP-2">OMB = Office of Management and Budget</FP> <FP SOURCE="FP-2">PRA = Paperwork Reduction Act</FP> <FP SOURCE="FP-2">RESPA = Real Estate Settlement Procedures Act</FP> <FP SOURCE="FP-2">RFA = Regulatory Flexibility Act</FP> <FP SOURCE="FP-2">RFI = Request for Information</FP> <FP SOURCE="FP-2">SBA = Small Business Administration</FP> <FP SOURCE="FP-2"> SIGTARP = Office of the Special Inspector General for the Troubled Asset Relief Program </FP> <FP SOURCE="FP-2">TILA = Truth in Lending Act</FP> <FP SOURCE="FP-2">URLA = Uniform Residential Loan Application</FP> <FP SOURCE="FP-2">USDA = United States Department of Agriculture</FP> <FP SOURCE="FP-2">VA = United States Department of Veterans Affairs</FP> </EXTRACT> <HD SOURCE="HD1">I. Summary</HD> <HD SOURCE="HD2">A. Goals of the Rulemaking</HD> Mortgage servicers handle the day-to-day management of mortgage loans and work with borrowers when they need help making their payments. Poor default servicing of home mortgages can have serious repercussions for both individual borrowers and the larger economy. The foreclosure crisis that began in 2007 demonstrated the risks. Leading up to that crisis, servicers did not have robust default servicing practices and generally lacked accountability when they failed to address borrower needs. Between July 2007 and August 2009, approximately 1.8 million homeowners lost their homes to foreclosure while another 5.2 million homeowners faced foreclosure initiation. <SU>1</SU> <FTREF/> <FTNT> <SU>1</SU>  Cong. Oversight Panel, <E T="03">October Oversight Report: An Assessment of Foreclosure Mitigation Efforts After Six Months,</E> at 1 (Oct. 9, 2009), <E T="03">https://www.congress.gov/111/cprt/JPRT52671/CPRT-11 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 403k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━