Today the Bureau released a notice of proposed rulemaking which would amend Regulation X to provide a special pre-foreclosure review period.
Good afternoon —
Will the CFPB really delay foreclosures until 2022 for those in COVID-related forbearance? Today the Bureau released a notice of proposed rulemaking which would amend Regulation X to provide a special pre-foreclosure review period prohibiting servicers from starting foreclosures until after December 31, 2021.
But will that be necessary? Today's MBA forbearance report showed that the share of loans in forbearance has fallen to 4.9% of servicers' portfolio volume and new forbearance requests also dropped to their lowest level since March, 2020.
Still, the bureau is estimating that at the current rate, there will be 1.7 million people exiting forbearance in the fall, and it wants to give servicers and borrowers time to work through that. The Bureau's concern is understandable, but there are several factors they need to consider.
As HousingWire Lead Analyst Logan Mohtashami writes in his latest article, jobs are rebounding in a big way, which could put many of those in forbearance on better financial footing. "We are on the verge of getting all the jobs back and then creating an extra 2 to 3 million jobs for the lost year due to COVID-19," he writes.
And, instead of foreclosure, it seems that many of the homeowners who have taken forbearance could decide to list their homes in one of the hottest markets in recent memory. Black Knight's latest report shows that there are 40% fewer homes on the market than this time last year, with prices rising accordingly.
Feel strongly one way or another? You have until May 11 to respond to the CFPB's proposal.
Until tomorrow —
Sarah Wheeler
HousingWire Editor in Chief
P.S. We are launching a newsletter tomorrow focused on valuations called AppraisalAlert. Sign up here to get curated valuation news every Tuesday!
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