Good afternoon —
The federal government, first under the Trump administration and now under Biden, has worked hard to keep millions of Americans from losing their homes because of the pandemic. Not only did the Federal Reserve embark on a historic bond-buying mission that pushed interest rates to record lows, but a series of forbearance measures let homeowners delay their mortgage payments and forestall foreclosure.
The latest move to help homeowners is Biden's announcement today that borrowers with loans backed by VA, FDA, or HUD can access mortgage options that let them extend the life of the loan, resulting in lower payments. In addition, the Homeowners Assistance Fund is set to provide $10 billion to states, D.C., territories, and tribes for relief to COVID-impacted homeowners after the foreclosure ban expires.
With the moratorium for federally backed mortgages set to expire next week, federal regulators, including the CFPB, have made very clear that lenders and servicers should be working with borrowers to help them keep their house if at all possible.
But that doesn't mean there should be a total ban on foreclosures during this time, as industry experts explained during a HousingWire Lunch & Learn webinar today on the CFPB's new rules and the digital opportunity in servicing.
Talking about vacant or abandoned properties and loans that had been delinquent before the pandemic, Wendy Lee, managing partner at McCalla Raymer Leibert Pierce, said the worst thing that could happen in those cases would be for servicers to freeze all their foreclosure proceedings because of an over-interpretation of the regulations.
Mark McArdle, assistant director of mortgage markets at the CFPB, agreed. Servicers should move forward with foreclosures for vacant or abandoned properties — under the applicable guidelines of course — to counter the negative effect on surrounding houses and neighborhoods, he said.
It was just one of the enlightening moments during this very interesting discussion. Register here to hear the whole thing on demand.
Until next week —
Sarah Wheeler
HousingWire Editor in Chief
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