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A new CFPB final rule effective August 31, 2021, amends RESPA Regulation X early intervention and loss mitigation requirements, found at 12 C.F.R. §§ 1024.39 and 1024.41. The amendments provide significant new rights to homeowners exiting a mortgage loan forbearance or experiencing a payment hardship related to the COVID-19 pandemic. See 86 Fed. Reg. 34,848 (June 30, 2021). For a redline version click here. The new rule:

  1. Requires servicers to comply with additional procedural safeguards before initiating foreclosure;
  2. Permits a servicer to offer certain streamlined loan modifications without requiring the borrower to submit a complete loss mitigation application;
  3. Specifies how and when a servicer must resume reasonable diligence efforts at the end of forbearance; and
  4. Imposes new early intervention requirements for borrowers in default.

Rule Coverage and Sunset

Significantly, the new rule applies not just to FHA, VA, USDA, Fannie Mae, and Freddie Mac mortgages, but applies broadly to “federally related” mortgage loans, as defined by RESPA. See NCLC, Mortgage Servicing and Loan Modifications § 3.2. “Federally related” is an extremely broad category, covering most of the mortgage market. The new rule applies even to servicers of non-federally-backed mortgage loans, including loans held in private-label securitization trusts. Moreover, the rule applies where a borrower has not received a forbearance, but has defaulted on mortgage payments while experiencing financial hardship due directly or indirectly to the COVID-19 emergency.

The new rule provisions are effective August 31, 2021. The amendments requiring servicers to comply with additional procedural safeguards before initiating foreclosure will sunset on December 31, 2021. The additional early intervention requirements apply until October 1, 2022. Other provisions in the new rule do not have a sunset date.

Significant Private Remedies for Rule Violations

When a mortgage servicer fails to comply with the requirements under the new rule, the borrower has a private right of action under RESPA for out of pocket and emotional distress damages, attorney fees, plus up to $2000 in statutory damages where there is a pattern or practice. Statutory damages in class actions are capped at $1 million. For more information on RESPA mortgage servicing requirements and private remedies, see NCLC’s Mortgage Servicing and Loan Modifications Chapter 3.

Temporary Procedural Safeguards Prior to Initiation of a Foreclosure

With approximately 2 million mortgage borrowers still in COVID-19-related loan forbearances, foreclosures may start before these borrowers have been evaluated for loss mitigation options. The CFPB’s existing servicing rule prohibits a servicer from initiating foreclosure until the borrower is more than 120 days delinquent, providing a pre-foreclosure period encouraging servicers to reach out to the borrower and review all loss mitigation options prior to the commencement of foreclosure, before substantial costs have been incurred and while the likelihood of a successful loss mitigation outcome is greatest. See NCLC’s Mortgage Servicing and Loan Modifications § 3.8.7.2.

While borrowers are not required to make payments when they are in forbearance, the CFPB defines such forbearance as a delinquency. Borrowers in forbearance for a period of four months or more without making payments, who then exit the forbearance without bringing the loan current, face imminent foreclosure because their loan is more than 120 days delinquent. To alleviate this problem, the final rule requires that servicers comply with additional procedural safeguards before making the “first notice or filing” necessary to initiate foreclosure from the effective date of August 31, 2021, until December 31, 2021. The CFPB explained that this is the time period in which it expects the greatest number of forbearance exits, leading to potential servicing errors due to capacity issues.

Advocates will have to determine what qualifies as the “first notice or filing” in their state, as it is defined by the existing RESPA rules and commentary. See NCLC’s Mortgage Servicing and Loan Modifications § 3.8.7.4.

The pre-foreclosure procedural safeguards only apply to mortgages secured by the borrower’s principal residence that became 120-days delinquent after March 1, 2020. A narrow subset of servicers called “small servicers”—those that service fewer than 5000 mortgages which they also own—also are not required to comply. See NCLC’s Mortgage Servicing and Loan Modifications §§ 3.2.5, 3.8.10. In addition, if the statute of limitations to foreclose will run prior to January 1, 2022, the servicer may initiate foreclosure without satisfying the procedural safeguards.

No Initiation of Foreclosure Unless One of Three Safeguards Are Met

For mortgages that are covered by the rule, a servicer may not make the first notice or filing necessary to initiate foreclosure under state law during the protected window of the period from August 31, 2021, to December 31, 2021, unless it has satisfied one of three procedural safeguards described below.

First, Borrower Evaluated Based upon Complete Application: The first procedural safeguard option for a servicer to be permitted to initiate foreclosure during the protected window applies if the borrower has submitted a complete loss mitigation application, has remained delinquent at all times since that complete application, and the servicer is permitted to foreclose under Reg. X § 1024.41(f)(2). Section 1024.41(f)(2) provides that after a complete application is received, the servicer may not initiate foreclosure until the borrower has been sent a written denial notice pursuant to section 1024.41(c)(1)(ii) and any appeal window has expired or the appeal has been denied, or the borrower has rejected all loss mitigation options offered by the servicer or failed to perform under a loss mitigation option.

The CFPB did not, as some consumer advocates recommended, require that any such review of a full application must have occurred after a certain date. Of course, few of the loans covered by the procedural safeguards will have gone through a complete application review during the past year, other than recently when a borrower exited forbearance. The CFPB acknowledged the possibility that a borrower could have changed circumstances since the time of a previous denial, and pointed out that investor rules might require another evaluation in those situations, although the servicer could still make the first notice or filing. See 86 Fed. Reg. at 34,884.

Second, Property Is Abandoned: The second possible “procedural safeguard” that may be satisfied, enabling a servicer to initiate foreclosure during the protected time-period, applies if the property securing the mortgage is abandoned according to the laws of the state or municipality where it is located. The CFPB declined to create its own definition of abandonment, but instead directs servicers to look to the law of the applicable jurisdiction. The Bureau points out that if a servicer initiates foreclosure on this basis, but a property is determined in fact not to be abandoned under applicable law, the safeguard would not have been satisfied, and the servicer would be in violation of RESPA. See 86 Fed. Reg. at 34,885.

Third, Borrower Is Unresponsive: The third “procedural safeguard” that a servicer may rely upon is the one most likely to be at play for borrowers that fell behind during the pandemic. This safeguard is satisfied if the servicer has not received any communication from the borrower for at least 90 days prior to making the first notice or filing and the following conditions are met:

  • • The servicer has satisfied its required early intervention live contact attempts during the 90-day period prior to the first notice or filing. The section-by-section analysis clarifies that this 90-day period of compliance may be satisfied based on activity that occurred prior to the effective date of the rule. See 86 Fed. Reg. at 34,885. However, for any stretch of the 90-day period that falls after the effective date of the overall rule, the servicer will have to comply with the enhanced early intervention efforts described elsewhere in this article, including the specific live contact attempt between 10 and 45 days prior to the end of forbearance, in which post-forbearance options must be described.
  • • The servicer sent the early intervention notice letter required by Reg. X § 1024.39(b) at least 10 and no more than 45 days prior to the first notice or filing. Recall that this early intervention notice letter (which exists already under RESPA and is generally required to be sent by the 45th day of delinquency) includes a statement encouraging the borrower to contact the servicer, a telephone number for the borrower’s point of contact assigned pursuant to section 1024.40, a brief description of available loss mitigation options and how to apply for them, and information about how to contact a HUD-certified housing counselor. The CFPB publishes a model early intervention notice in Appendix MS4 to § 1024. The CFPB recently translated the model notice provisions into Spanish. Servicers are not explicitly required to provide the notice in Spanish, but arguably should do so to satisfy fair lending obligations and ensure that their COVID-19 servicing outreach does not have a disparate impact on immigrant groups.
  • • The servicer has sent all notices required by Reg. X § 1024.41, as applicable, during the 90-day period before the servicer makes the first notice or filing. In theory this might include a section 1024.41(b)(2) notice (if the borrower has submitted an incomplete application during the 90-day period or has defaulted on a streamlined mod trial payment plan and the notice was not provided previously), and could also include the section 1024.41(c)(2)(iii) letter if a forbearance was offered or extended during the 90-day period; and
  • • The borrower’s forbearance, if applicable, ended at least 30 days before the servicer makes the first notice or filing.

The general implication of this procedural safeguard is that servicers will be prohibited from making the first notice or filing to initiate foreclosure if the borrower and servicer are in communication and the borrower “has not exhausted their loss mitigation options.” See 86 Fed. Reg. at 34,883.

What Counts as “Communication from The Borrower” for Purposes of the Third Safeguard

A critical point in determination if a servicer has met the third safeguard is what counts that the servicer has not received a communication from the borrower. The CFPB clarified that a servicer has not received a communication from the borrower (meaning the borrower would be deemed unresponsive, the third safeguard has been met, and the servicer could initiate foreclosure) if the servicer:

  • • Has not received any written or electronic communication from the borrower about the mortgage loan;
  • • Has not received a telephone call from the borrower about the mortgage loan;
  • • Has not successfully established live contact with the borrower about the mortgage; and
  • • Has not received a payment from the borrower on the mortgage.

See Reg. X Official Interpretation § 1024.41(f)(3)(ii)(C)-1; 86 Fed. Reg. 34,848, 34,902.

A communication from the borrower’s agent counts as a communication from the borrower. Id. § 1024.41(f)(3)(ii)(C)-2; 86 Fed. Reg. 34,848, 34,903. Servicers may set up “reasonable procedures” for determining whether a person who claims to be an agent of the borrower has authority. Id. The word “reasonable” here should be used to push back on any unduly burdensome requirements for third party authorizations.

The Bureau intends to “closely monitor” consumer complaints and examine servicers to “ensure that servicer’s procedures have not created obstacles that frustrate a borrower’s ability to engage with the servicer” or that “make borrowers appear unresponsive even though they were attempting to contact the servicer.” 86 Fed. Reg. 34,848, 34,886. This includes determining whether servicer phone lines have unreasonably long hold times. Id. Moreover, the CFPB specified that its record retention requirements for servicers include a requirement that if the servicer makes the first notice or filing before January 1, 2022, the servicer’s records must include evidence that one of the procedural safeguards was satisfied, such as evidence that the servicer did not receive communications from the borrower during the key time-period and that all other required notices and outreach efforts were made. Reg. X Official Interpretation § 1024.41(f)(3)-1; 86 Fed. Reg. 34,848, 34,902.

Practical Implications and Examples of Procedural Safeguards

Assume a borrower fell behind on their mortgage after March 1, 2020, and has just exited a forbearance. Nothing prevents the servicer from initiating foreclosure before the rule’s effective date of August 31, 2021, unless the borrower completes an application more than 37 days prior to the foreclosure sale date (see existing Reg. X § 1024.41(g)). However, Fannie Mae and Freddie Mac are requiring their servicers to begin complying with the new RESPA safeguards effective August 1, 2021. See Federal Housing Finance Agency, FHFA Protects Borrowers After COVID-19 Foreclosure and REO Eviction Moratoriums End (June 29, 2021).

If the borrower has already had a complete application reviewed and has not been brought current, the servicer may initiate foreclosure, regardless of when that review happened. However, very few borrowers who fell behind after March 1, 2020, have submitted complete applications. Most have been in forbearance based on incomplete applications. Recall that if a borrower became 120 days in default prior to March 1, 2020, then the procedural safeguards don’t apply anyway.

Assume the borrower called the servicer when the forbearance was about to end. Whenever that contact attempt happened, it starts a new 90-day clock running. The servicer must not make the first notice or filing until a 90-day period has gone by in which the borrower has not made any communication with the servicer (including making a payment). The servicer also cannot initiate foreclosure within the 30-day period immediately after the end of a forbearance.

A servicer can initiate foreclosure after January 1, 2022, without checking any of these boxes. Some servicers might simply wait for that time period to end. However, the rule seeks to incentivize servicers to work out loss mitigation options for any borrowers who are attempting to communicate with them, since the servicer cannot (for now) initiate a foreclosure.

A servicer that initiates foreclosure (makes the first notice or filing) at a time when none of the procedural safeguards have been satisfied violates RESPA. The homeowner’s attorney should send a notice of error raising the dual tracking violation. See 12 C.F.R. § 1024.35(b)(9) (listing violations of section 1024.41(f) as a covered error), § 1024.35e(3)(B) (deadline to respond to an NOE related to dual tracking is prior to the date of the foreclosure sale). This gives rise to an argument for injunctive relief stopping the foreclosure, particularly if raised as a state law wrongful foreclosure claim. See NCLC’s Mortgage Servicing and Loan Modifications § 3.12.5. It is also a good idea to file a complaint at the CFPB complaint portal, so that the Bureau can effectively look for patterns of non-compliance with the rule and bring appropriate enforcement actions.

Rule’s New Anti-Evasion Exception for Streamlined Loan Modification Offers

The CFPB was also concerned with whether servicers would be able to handle the high volume of requests from borrowers asking for help with loss mitigation at the end of forbearance. When a borrower seeks help from a servicer, existing CFPB rules require that the servicer obtain a complete loss mitigation application from the borrower. Most servicers are required to adhere to guidelines for a complete application set by owners of loans, investors, or government insurers. Once the application is complete, the servicer must review the borrower not only for any specific loan modification option for which the borrower asked, but for all options offered by the owner or assignee of the borrower’s mortgage. See NCLC’s Mortgage Servicing and Loan Modifications § 3.8.2.8.

The existing anti-evasion rule provides that a servicer must not evade this duty as to complete applications by offering the borrower an option based on an incomplete application. See Reg. X § 1024.41(c)(2). Before the COVID-19 pandemic, the anti-evasion rule had two narrow exceptions (including one for short-term options, such as a loan forbearance). See NCLC’s Mortgage Servicing and Loan Modifications § 3.8.2.10. A June 2020 Interim Final Rule created a third exception, permitting servicers to offer payment deferrals to deal with a COVID-19 delinquency. These payment deferrals allow a borrower to resume regular mortgage payments when a forbearance or delinquency ends and account for the months of missed payments by placing them at the end of the loan term. See NCLC’s Mortgage Servicing and Loan Modifications § 3.8.2.10.4. However, the Interim Final Rule was limited to payment deferrals and did not permit offering other loan modification options based on an incomplete application.

As the pandemic has lengthened, borrowers have remained in forbearance for 12 or even 18 months. Many of these borrowers will not be able to resume their contractual mortgage payment and will need permanent payment-reduction options. FHA, USDA, VA, Fannie Mae, and Freddie Mac have responded by directing servicers to offer borrowers one or more “streamlined” loan modification options without collecting proof of income and full applications. Given the number of borrowers likely to need loan modifications within a very short window of time and the burden on servicers in collecting income and other documentation, there are good reasons to allow servicers to make a streamlined loan modification offer without collecting a complete application and reviewing the borrower simultaneously for all available options. The final rule creates a fourth exception to the anti-evasion rule permitting servicers to offer certain streamlined loan modifications to borrowers with COVID-19-related hardships.

The CFPB describes the new temporary exception in new Reg. X §1024.41(c)(2)(vi) that allows a servicer to offer a loan modification based on an incomplete application if the following criteria are met:

  1. The modification extends the loan term by no more than 480 months from the modification effective date and does not cause the principal and interest payment to increase beyond the current principal and interest payment for the entire term;
  2. If certain amounts are to be deferred, those amounts will not bear interest and will not come due until the earliest of maturity, sale of the house, refinance, or the termination of FHA mortgage insurance;
  3. The loan modification is made available to borrowers experiencing a COVID-19 hardship (although the Bureau commented that it need not be available only to such borrowers—e.g., the Flex Mod is available both based on COVID hardships and other hardships);
  4. The borrower’s delinquency will be resolved either upon acceptance or upon completion of a trial payment plan; and
  5. The servicer “does not charge any fee in connection with the loan modification” and waives all late fees, penalties, stop payment fees, or similar charges that were incurred after March 1, 2020, promptly upon the borrower’s acceptance of the modification.

In the proposed rule the CFPB had considered requiring waiver of all late fees and similar charges, but it modified the final rule to conform better with FHA’s streamlined modification policy, which requires waiver only of such charges incurred after March 1, 2020. The Bureau clarified in the final rule’s section-by-section analysis that “other similar charges” did not include charges paid to a third-party vendor, such as inspection fees. 86 Fed. Reg. 34,848, 34,873. At least for federally-backed servicers, it may be argued that any inspection fees incurred while the borrower was in a forbearance cannot be charged to the borrower, based on the CARES Act prohibition on fees, penalties, or interest beyond the amount that would be charged if the borrower was making timely payments. See CARES Act § 4022(b)(3).

The new rule should enable servicers to offer streamlined modifications pursuant to Fannie Mae, Freddie Mac, and FHA policies. However, in the very rare situation that an FHA COVID-19 Recovery Modification results in a principal and interest payment increase, the rule does not apply to the modification, and the servicer must collect a complete application and evaluate for all options, rather than making a streamlined offer.

The new rule may also incentivize servicers of private label and portfolio loans to offer similar streamlined options compliant with the rule. In so doing, it creates a basic floor for the quality of loan modifications offered based on an incomplete application.

The CFPB also specified in this section that a servicer may suspend reasonable diligence efforts when a borrower accepts a streamlined modification (by whatever means the servicer invites such acceptance—which could be oral), and must “immediately” resume reasonable diligence efforts if a borrower defaults on trial payment plan payments for the streamlined modification or requests further assistance. See 12 C.F.R. § 1024.41(c)(2)(vi)(B). The servicer must also send the section 1024.41(b)(2) notice upon such trial payment plan failure or request for further assistance, unless the servicer has already provided it.

New Rule Provisions Regarding Escrow Payments

The CFPB also took important steps in the preamble and section-by-section analysis to clarify that servicers may capitalize both escrow advances and escrow shortages in a loan modification without violating RESPA. See 86 Fed. Reg. 34,848, 34,867. The CFPB also “strongly encourages” servicers to conduct a short year escrow analysis in connection with a loss mitigation review. Id. FHA’s COVID-19 loan modification and partial claim options explicitly require servicers to capitalize any escrow shortage (so as to prevent the payment shock that might otherwise result to the borrower).

Fannie Mae and Freddie Mac do not yet require this, but advocates can push for it in individual cases, and NCLC will continue to advocate for a policy change on this issue. Advocates can also send a request for information related to the borrower’s escrow account, timed in order to get a response before the borrower will have to agree to a post-forbearance option, in order to anticipate and address this issue. Click here for such a sample request for information. Fannie Mae and Freddie Mac do allow servicers to spread an escrow shortage over up to 60 months. See Fannie Mae Lender Letter (LL-2020-07) (Nov. 18, 2020); Freddie Mac Servicing Guide § 9206.15.

New Rule Requires Resumption of Reasonable Diligence

Reg. X imposes a general requirement that servicers exercise reasonable diligence to complete borrowers’ loss mitigation applications. See Reg. X § 1024.41(b)(1). The Official Interpretation of Reg. X §41(b)1-4.iii permits a servicer to suspend reasonable diligence efforts if a borrower is performing on a forbearance until near the end of the forbearance. This comment had not specified exactly when efforts should resume, because loan forbearances generally extended over a brief period of three to six months. With many borrowers in unusually long 12- to 18-month COVID-related forbearances, the CFPB found it necessary to specify when and how servicers must resume reasonable diligence.

If the borrower is in a COVID-19-related forbearance program that was offered based on an incomplete application, and the borrower remains delinquent, new Official Interpretations of Reg. X § 41(b)1-4.iv provides that a servicer must contact the borrower no later than 30 days before the scheduled end of the forbearance period. The servicer must determine if the borrower wishes to complete the loss mitigation application and proceed with a full loss mitigation evaluation. If the borrower requests further assistance, the servicer must exercise reasonable diligence to complete the application before the end of the forbearance period.

The CFPB selected the 30-day time-period in part to align with the GSE’s Quality Right
Party Contact (QRPC) guideline, which requires servicers to establish QRPC at least 30 days before the end of the initial 12-month cumulative COVID-19 forbearance period, or at least 30 days before the end of any forbearance extension. See Fannie Mae Lender Letter (LL-2021-02) (June 30, 2021).

Additional Early Intervention Requirements

Reg. X requires a servicer to make good faith efforts to establish “live contact” with a delinquent borrower not later than the thirty-sixth day of the borrower’s delinquency, and again no later than thirty-six days after each payment due date, so long as the borrower remains delinquent. Servicers are also required to give borrowers a written notice no later than the forty-fifth day of the borrower’s delinquency, and again no later than forty-five days after each payment due date, so long as the borrower remains delinquent. These early intervention requirements are discussed in NCLC’s Mortgage Servicing and Loan Modifications § 3.7.

Reg. X § 1024.39 requires servicers to comply with early intervention when a borrower is in forbearance. However, the April 2020 Joint Agency Statement said that it would not take supervisory or enforcement action against servicers for delays in complying with the early intervention rule. The CFPB has received complaints that servicers are not giving borrowers complete or accurate information regarding available loss mitigation options. See CFPB Complaint Bulletin (May 2021). The CFPB’s final rule addresses this by compelling servicers to take additional early intervention actions until October 1, 2022.

Live Contact with Borrowers Not in Forbearance: until October 1, 2022, when a servicer establishes live contact with a borrower based on the timing requirements in existing Reg. X § 1024.39(a), and the borrower is not in a forbearance program and the owner or assignee of the loan generally makes loan forbearances available to borrowers, temporary section 1024.39(e)(1) requires the servicer to inform the borrower of the following information:

  • • That forbearance programs are available for borrowers experiencing a COVID-19-related hardship;
  • • Unless borrowers state that they are not interested in receiving information
    about forbearances, a list and brief description of any currently available forbearance programs and the actions the borrower must take to be evaluated for the programs; and
  • • At least one way that the borrower can find contact information for homeownership counseling services, such as by referring the borrower to this information on periodic statements.

Live Contact with Borrowers in Forbearance: until October 1, 2022, if the borrower is in a COVID-19-related forbearance program, additional information must be provided to the borrower if a live contact occurs at least 10 days and no more than 45 days before the scheduled end of the forbearance or, if the scheduled end of the forbearance occurs between August 31, 2021, and September 10, 2021, during the first live contact made after August 31, 2021. Temporary section 1024.39(e)(2) requires the servicer to inform the borrower of the following:

  • • The date the borrower’s current forbearance program is scheduled to end;
  • • A list and brief description of each of the types of forbearance extension, repayment options, and other loss mitigation options currently made available to the borrower by the owner or assignee of loan, and the actions the borrower must take to be evaluated for such options; and
  • • At least one way that the borrower can find contact information for homeownership counseling services, such as by referring the borrower to this information on periodic statements.

Clarifications to CFPB Commentary Concerning Live Contacts

The CFPB’s existing commentary for section 1024.39 provides examples of a servicer’s good faith efforts to establish live contact with the borrower and discusses how the early intervention requirements interact with the loss mitigation procedures in section 1024.41. It provides that if the servicer has established and is maintaining ongoing contact with the borrower under the section 1024.41 loss mitigation procedures, such as by working with the borrower to complete a loss mitigation application or by evaluating the borrower’s complete loss mitigation application, the servicer need not otherwise attempt to establish live contact with the borrower. See Official Interpretations of Reg. X § 1024.39(a)-6; NCLC’s Mortgage Servicing and Loan Modifications § 3.7.3.

The final rule amends the commentary due to concerns that the commentary could be misconstrued as overriding the new COVID-19 requirements if the servicer is in contact with the borrower about a forbearance. The amendment applies when the borrower is in a COVID-19-related forbearance such that the additional live contact information is required under temporary section 1024.39(e)(2), or if a servicer relies on the temporary special COVID-19 loss mitigation procedural safeguards under section 1024.41(f)(3)(ii)(C)(1) to initiate a foreclosure (as discussed above). In those cases, the servicer is not maintaining ongoing contact with the borrower under section 1024.41 in a way that would comply with section 1024.39(a) if the servicer has only sent the five-day acknowledgement notice required by section 1024.41(b)(2) and the forbearance notice under (c)(2)(iii), and has had no further ongoing contact with the borrower concerning the borrower’s incomplete loss mitigation application.

Good faith efforts to establish live contact with a borrower generally consist of reasonable steps, under the circumstances, to reach a borrower. The CFPB’s existing commentary states that relevant circumstances a servicer may consider include the length of the borrower’s delinquency and whether the borrower has failed to respond to the servicer’s repeated attempts at communication. It provides as an example that good faith efforts to establish live contact with “an unresponsive borrower with six or more consecutive missed payments might require no more than including a sentence requesting that the borrower contact the servicer with regard to the delinquencies in the periodic statement or in an electronic communication.” See Official Interpretations of Reg. X § 1024.39(a)-3; NCLC’s Mortgage Servicing and Loan Modifications § 3.7.3.

Again, out of concern that this commentary might cause servicers to not comply with the new COVID-19 information requirements, the final rule amends the commentary to state that providing no more than a sentence in a periodic statement or electronic communication requesting that the borrower contact the servicer about the delinquencies would not be a reasonable step under the circumstances, in two situations: either when additional live contact information is required under section 1024.39(e) or if a servicer relies on the temporary special COVID-19 loss mitigation procedural safeguards under section 1024.41(f)(3)(ii)(C)(1) to initiate a foreclosure.

NCLC Webinar Detailing the New Rule

NCLC will present a free webinar providing an overview of the final rule on August 26, 2021 at 3:00 pm Eastern time.

See also NCLC’s article, Fourteen New Federal Actions Protecting Mortgage Borrowers.

Author Name: 
Sarah Mancini and John Rao
About Author: 

Sarah Bolling Mancini is a staff attorney focusing on foreclosures, mortgage lending, and credit reporting issues. Sarah previously worked in the Home Defense Program of Atlanta Legal Aid, and has represented homeowners in litigation in state, federal district, and bankruptcy courts. She also clerked for the Honorable Amy Totenberg, U.S. District Court for the Northern District of Georgia. Sarah is a member of the Georgia Bar. She received her B.A. in public policy from Princeton University and her J.D. from Harvard Law School.

John Rao is an attorney with the National Consumer Law Center, where he focuses on consumer credit, mortgage servicing, and bankruptcy issues. Mr. Rao frequently appears as a panelist and instructor at bankruptcy and consumer law trainings and conferences, and serves as an expert witness in court cases. He has testified in Congress on bankruptcy and mortgage servicing matters. Mr. Rao is a contributing author and editor of NCLC’s Home Foreclosures and Mortgage Servicing and Loan Modifications and Bankruptcy Basics. He is also a contributing author to Collier on Bankruptcy and the Collier Bankruptcy Practice Guide. Mr. Rao served as a member of the federal Judicial Conference Advisory Committee on Bankruptcy Rules from 2006 to 2012, appointed by Chief Justice John Roberts. He is a conferee of the National Bankruptcy Conference, fellow of the American College of Bankruptcy, member of the editorial board of Collier on Bankruptcy, board member of the National Consumer Bankruptcy Rights Center, Commissioner on the American Bankruptcy Institute’s Commission on Consumer Bankruptcy, and former board member of the National Association of Consumer Bankruptcy Attorneys and the American Bankruptcy Institute. Mr. Rao was the 2017 recipient of the National Conference of Bankruptcy Judges’ Excellence in Education Award.

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Thursday, August 5, 2021
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