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CFPB Proposes Extending Foreclosure Moratorium Until 2022

Posted on in Foreclosure

Arlington heights foreclosure attorneyThe COVID-19 pandemic has caused financial difficulty for many families throughout the United States. Many businesses have been forced to close or scale back their operations, resulting in widespread job losses or reductions in work hours. Many people who are struggling to pay their regular expenses have defaulted on their mortgage payments, putting them at risk of losing their homes. Fortunately, federal and state governments have placed a moratorium on foreclosures, ensuring that families will not be forced out of their homes in addition to the other difficulties they are facing. While the current foreclosure moratorium lasts through June 30, 2021, the Consumer Financial Protection Bureau (CFPB) has proposed an extension of the moratorium through the end of the year.

Details of the CFPB’s Proposal

Based on an analysis of data by the CFPB, around three million homeowners in the United States are behind on their mortgage payments. While the foreclosure moratorium has allowed many of these homeowners to receive forbearance on mortgage payments, the CFPB estimates that this forbearance period will end for around 1.7 million homeowners in September of 2021. This could result in a massive wave of foreclosures that could cause millions of families to be displaced from their homes.

To address this issue, the CFPB has proposed an extension of the prohibition against foreclosures through December 31, 2021. This would give homeowners more time to figure out how to pay off the amounts they owe and resume ongoing payments. The CFPB is also proposing a streamlined process for allowing lenders to offer loan modifications to homeowners. This would reduce the amount of paperwork required to make these types of modifications, allowing homeowners to begin making affordable mortgage payments more quickly. The proposed rule would limit modifications to agreements that would not increase the amount of a homeowner’s monthly payments and that would not extend the term of a loan for more than 40 years after the date of modification.

Contact a Round Lake Foreclosure Defense Attorney

The CFPB’s proposal has not yet gone into effect, and as with the current foreclosure moratorium, it would only apply to federally-backed mortgages. If you are having problems making mortgage payments, or if you have defaulted on your mortgage, you may still have options for defending against foreclosure. At Newland & Newland, LLP, we can help you take the necessary steps to avoid the loss of your home, and we will help you negotiate any necessary loan modifications that will allow you to make affordable payments. To set up a complimentary consultation and get legal help with your financial situation, contact our Gurnee loan modification lawyers at 847-549-0000.

Sources:

https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-mortgage-servicing-changes-to-prevent-wave-of-covid-19-foreclosures/

https://www.fool.com/millionacres/real-estate-market/articles/cfpb-wants-to-ban-foreclosures-until-2022-effect-on-investors/

https://themortgagereports.com/75868/cfpb-foreclosure-moratorium

 

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