Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X; Rescission

<RULE> CONSUMER FINANCIAL PROTECTION BUREAU <CFR>12 CFR Part 1024</CFR> <DEPDOC>[Docket No. CFPB-2025-0014]</DEPDOC> <RIN>RIN 3170-AB42</RIN> <SUBJECT>Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X; Rescission</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Consumer Financial Protection Bureau. <HD SOURCE="HED">ACTION:</HD> Interim final rule; request for public comment. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This interim final rule (IFR) rescinds the final rule “Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X.” </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This IFR is effective on July 15, 2025. Comments must be received on or before June 16, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may submit responsive information and other comments, identified by Docket No. CFPB-2025-0014, by any of the following methods: • <E T="03">Federal eRulemaking 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-2025-0014.</E> • <E T="03">Email: 2025-COVID-Mortgage-Servicing-Rescission@cfpb.gov.</E> Include Docket No. CFPB-2025-0014 in the subject line of the message. • <E T="03">Mail/Hand Delivery/Courier:</E> Comment Intake—Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X, Rescission, 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. Additionally, where the Bureau has asked for specific comment on a topic, commentors should seek to highlight the topic to which its comment is applicable. 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> Dave Gettler, Paralegal Specialist, Office of Regulations, at 202-435-7700. 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> This IFR rescinds “Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X,” 86 FR 34848 (June 30, 2021) (2021 COVID RESPA Rule), for two reasons: First, the 2021 COVID RESPA Rule adopted temporary procedural safeguards related to mortgage foreclosure, temporarily permitted mortgage servicers to offer certain loan modifications made available to borrowers experiencing a COVID-19 related hardship, and finalized certain temporary amendments to Regulation X related to the COVID-19 pandemic. The rule stated that the temporary procedural safeguards do not apply if a servicer makes the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process on or after January 1, 2022. In addition, the rule stated that the temporary COVID-19 related live contact requirements would only be required until October 1, 2022. On April 10, 2023, then-President Biden signed a joint resolution of Congress declaring that “the national emergency declared by the finding of the President on March 13, 2020” related to the COVID-19 pandemic “is hereby terminated.” <E T="03">See</E> Public Law 118-3 (Apr. 10, 2023). The Bureau finds that it has good cause to remove, without prior notice and comment, language relating to the COVID-19 pandemic added by the 2021 COVID RESPA Rule, as prior notice and comment is unnecessary. Both the temporary additional early intervention live contact requirements and the temporary special COVID-19 loss mitigation procedural safeguards have been sunset by their own terms, and the COVID-19 Public Health Emergency expired on May 11, 2023. Thus, borrowers and servicers are no longer utilizing these safeguards. Moreover, the Bureau proposed a rule on July 24, 2024 (89 FR 60204), that would provide additional flexibility to servicers to offer streamlined loss mitigation options when borrowers seek payment assistance. As part of the revised framework, the proposal would have removed the provisions implemented in response to the COVID-19 pandemic, and the Bureau did not receive public comments on the proposed removal of those provisions. As part of any future rulemaking, the Bureau would consider and address comments received in response to the 2024 proposed rule, including comments related to applying the loss mitigation lessons learned from the COVID-19 pandemic. Second, it is the policy of the Bureau to streamline regulatory requirements to reduce burdens on the American public. The Bureau has determined that, in light of the end of the COVID-19 pandemic, these regulations needlessly complicate Regulation X without commensurate benefits. <HD SOURCE="HD1">Section 1022 Analysis</HD> In developing this rule, the Bureau has considered the potential benefits, costs, and impacts as required by section 1022(b)(2)(A) of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. 5512(b)(2)(A). This rule does not impose any costs to consumers or covered persons or have any direct impact on consumers' access to consumer financial products or services. Further, it has no unique impact on insured depository institutions or insured credit unions with less than $10 billion in assets, as described in section 1026(a) of the CFPA. Finally, it does not have any unique impact on rural consumers. <HD SOURCE="HD1">Legal Authority</HD> The Bureau is issuing this IFR pursuant to its authority under 12 U.S.C. 2617(a), 2506(j)(3), and 2605(k)(1)(E); 12 U.S.C. 5512(b)(1); and 12 U.S.C. 5532. <LSTSUB> <HD SOURCE="HED">List of Subjects in 12 CFR Part 1024</HD> Banks, Banking, Condominiums, Consumer protection, Credit unions, Housing, Mortgage insurance, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations. </LSTSUB> <HD SOURCE="HD1">Authority and Issuance</HD> For the reasons set forth in the preamble, the Bureau amends Regulation X, 12 CFR part 1024, as set forth below: <HD SOURCE="HED">PART 1024—REAL ESTATE SETTLEMENT PROCEDURES ACT (REGULATION X)</HD> <REGTEXT TITLE="12" PART="1024"> 1. The authority citation for part 1024 continues to read as follows: <HD SOURCE="HED">Authority:</HD> 12 U.S.C. 2603-2605, 2607, 2609, 2617, 5512, 5532, 5581. </REGTEXT> <SUBPART> <HD SOURCE="HED">Subpart C—Mortgage Servicing</HD> <SECTION> <SECTNO>§ 1024.31</SECTNO> <SUBJECT>[Amended]</SUBJECT> </SECTION> </SUBPART> <REGTEXT TITLE="12" PART="1024"> 2. Amend § 1024.31 by removing the definition of “COVID-19-related hardship.” </REGTEXT> <REGTEXT TITLE="12" PART="1024"> 3. Amend § 1024.39 by: a. Revising paragraph (a); and b. Removing paragraph (e). The revision reads as follows: <SECTION> <SECTNO>§ 1024.39</SECTNO> <SUBJECT>Early intervention requirements for certain borrowers.</SUBJECT> (a) <E T="03">Live contact.</E> Except as otherwise provided in this section, a servicer shall establish or make good faith efforts to establish live contact with a delinquent borrower no later than the 36th day of a borrower's delinquency and again no later than 36 days after each payment due date so long as the borrower remains delinquent. Promptly after establishing live contact with a borrower, the servicer shall inform the borrower about the availability of loss mitigation options, if appropriate. <STARS/> </SECTION> </REGTEXT> <REGTEXT TITLE="12" PART="1024"> 4. Amend § 1024.41 by: a. Revising paragraphs (c)(2)(i) and (c)(2)(v)(A)( <E T="03">1</E> ); and b. Removing paragraphs (c)(2)(vi) and (f)(3). The revisions read as follows: <SECTION> <SECTNO>§ 1024.41</SECTNO> <SUBJECT>Loss mitigation procedures.</SUBJECT> <STARS/> (c) * * * (2) * * * (i) <E T="03">In general.</E> Except as set forth in paragraphs (c)(2)(ii), (iii), and (v) of this section, a servicer shall not evade the requirement to evaluate a complete loss mitigation application for all loss mitigation options available to the borrower by offering a loss mitigation option based upon an evaluation of any information provided by a borrower in connection with an incomplete loss mitigation application. <STARS/> (v) * * * (A) * * * ( <E T="03">1</E> ) The loss mitigation option permits the borrower to delay paying covered amounts until the mortgage loan is refinanced, the mortgaged property is sold, the term of the mortgage loan ends, or, for a mortgage loan insured by the Federal Housing Administration, the mortgage insurance terminates. For purposes of this paragraph (c)(2)(v)(A)( <E T="03">1</E> ), “covered amounts” includes, without limitation, all principal and interest payments forborne under a payment forbearance program made available to borrowers experiencing a COVID-19-related hardship, including a payment forbearance program made pursuant to the Coronavirus Economic Stabilization Act, section 4022 (15 U.S.C. 9056); it also includes, without limitation, all other princi ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 27k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━