Consumer Financial Protection Bureau proposes ban on new foreclosure filings until 2022

NATION: The Consumer Financial Protection Bureau (CFPB) has proposed a ban on instigating new residential foreclosures through 2021.

Apr 5, 2021, CFPB proposed a rule that would “provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021”, according to the press release.

The proposal was in response to the expected uptick in borrowers exiting forbearance as 2021 progresses into fall season, which is anticipated to strain mortgage servicers and the economy.

Possible exemptions to allow servicers to file earlier foreclosures has been discussed, for those situations where borrowers are unresponsive to contact attempts.

Comments are encouraged, to assist in determining provisos and the duration of any moratorium, with comments having an open period until May 11, 2021.

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