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New Changes Under CFPB to Foreclosure Process

In the past week, according to HousingWire.com, the Consumer Financial Protection Bureau is working toward adding additional measures to make sure that homeowners going through foreclosure are being treated fairly by mortgage companies . Some of the measure include:

1. Extending protections to the borrower. As of now the mortgage service is required to give the borrower certain protections for foreclosure. This includes the right, only once during the life of the loan, to be evaluated under the CFPB's requirements to avoid foreclosure. With the new rule, borrowers can use the protection again on any loan current since the last loss mitigation application.

1. Expanding protections for death. The current ruling for if someone dies under CFPB regulations is that mortgage services promptly communicate with family members, heirs, or "successors of interest", who might have a legal interest in regards to the deists' home. Now, however, with the new changes, those who qualify as "successors of interest" will be expanded. They will qualify in the case of property transfer due to divorce, legal separation, through a family trust, between spouses, from a parent to a child.

2. Under the new regulations services are required to notify borrowers immediately that the loss mitigation is complete, therefore borrowers will be well aware of the status on their application and foreclosure protections.

3. Changes will be made to the timeframe. The transferee service has the same amount of time to comply with the loss of mitigation requirements as the transferor service. This way the borrower will know where they stand with both servicers.

4. The new proposal will make sure that servicer take the necessary steps to protect borrowers from a wrongful foreclosure. . If the proper steps are not followed then the service must dismiss a pending foreclosure.

5. The new regulations will state that delinquency starts on the day a borrower fails to make a regular, periodic payment. However, if a borrower misses a payment but later makes up for that payment, the servicer can apply the payment to the oldest outstanding payment, then the date for delinquency will be extended.

6. Providers will be require to send out periodic updates of statements to borrowers, with information solely about their bankruptcy. This will also require services to provide borrowers with a written early notice about the loss of mitigation options.

When it comes to foreclosure it is important to know your rights. Bankruptcy is not an easy issue to go through, but fortunately there is help available. If you, or someone you know is thinking about bankruptcy or in danger of foreclosure, contact an experienced attorney to guide you through the process and help you become financially stable.

Work Cited:

CFPB Proposes 7 Big Changes to Foreclosure Process for Mortgage Servicers (Bankruptcy News) http://news.abi.org/headlines/cfpb-proposes-7-big- changes-to-foreclosure-process-for-mortgage-servicers

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