WASHINGTON—The CFPB’s new interim final rule related to Regulation X, which clarified mortgage servicers do not violate the regulation's provisions by offering certain coronavirus-related payment deferral options, was the subject of a discussion between the Bureau and NAFCU Senior Regulatory Counsel Elizabeth LaBerge. The conversation also focused on how the Bureau can provide more relief to credit unions amid the coronavirus pandemic.
The rule took effect July 1.
According to NAFCU, during the meeting LaBerge asked the Bureau to address other post-forbearance options, such as disaster loan modifications, in a similar way so credit unions are not burdened trying to compile full loss-mitigation applications when they are not required by investors for review.
The Regulation X issue arose following the Federal Housing Finance Agency's announcement that the government-sponsored enterprises (GSEs) would begin offering a new payment deferral option for loans in forbearance. The payment deferral option provides borrowers who are able to return to making their normal monthly mortgage payment the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity.
Certain Criteria
NAFCU said the Bureau explained Regulation X would normally require servicers to collect a complete loss mitigation application before making an offer, with some exceptions. The IFR detailed certain criteria loss mitigation options must meet to qualify for the coronavirus-related exception, and noted that the exception is not limited to payments forborne under the CARES Act.
For servicers, the IFR provided some relief as it does not require servicers to exercise reasonable diligence to obtain a complete application nor provide the acknowledgement notice once the borrower accepts an offer for an eligible program, according to the trade group.