I may sound like I am beating a horse at this point, but interest rates are on absolute fire at a 50-year low. No matter what your goals are, how many homes you have… now is the time to strike while the iron is hot. Make sure to take advantage and pick up those additional properties. Go refinance your current long term holds and increase your cash flow. Pull out the cash to purchase additional properties. Do not let the time pass when money is this affordable is what I am trying to say.

CFPB to Allow Servicers to Offer Covid 19 Loss Mitigation Based on Incomplete Apps

The Consumer Financial Protection Bureau (CFPB) announced on June 23rd an Interim Final Rule (IFR) that will allow mortgage servicers to offer COVID-19 loss mitigation options to borrowers with federally backed mortgages without the borrower having provided a complete loss
mitigation application. The IFR amendment to the Section 1021.41 of Regulation X will allow servicers to more efficiently offer loss mitigation options to borrowers that are attempting to exit a COVID-19 related forbearance.

Previous to the IFR, providing loss mitigation services to a borrower without a complete loss mitigation application would have been a violation of Regulation X. The IFR which took effect on July 1, 2020 will allow servicers to review and offer loss mitigation services based on the information provided by the borrower, even if it’s not considered a fully completed loss mitigation application by Regulation X standards.

Some of the criteria that must be met include all the following:

• The loss mitigation option permits the borrower to delay paying certain amounts until the mortgage loan is refinanced, the mortgage property is sold, the term of the mortgage loan ends, or, for a mortgage loan insured by the FHA, the mortgage loan terminates. These amounts include, without limitation, all principal and interest payments forborne under a payment forbearance program made available to borrowers experiencing a financial hardship due, directly or indirectly, to the COVID-19 emergency, including a payment forbearance program made pursuant to the CARES Act. These
amounts also include principal and interest payments that are due and unpaid by a borrower experiencing financial hardship due, directly, or indirectly, to the COVID-19 emergency.

• Any amounts that the borrower may delay paying through the loss mitigation option does not accrue interest.

• The servicer does not charge any fee in connection with the loss mitigation option.

• The servicer waives all existing late charges, penalties, stop payment fees, or similar charges upon the borrower’s acceptance of the loss mitigation option.

• The borrower’s acceptance of the loss mitigation option resolves any prior delinquency.

If the borrower accepts an eligible loss mitigation option, the IFR also exempts servicers from certain requirements that would normally accompany an incomplete loss mitigation application such as the fiveday acknowledgment notice required by Regulation X. All other requirements for loss mitigation must still be adhered to after a borrower accepts an eligible loss mitigation offer.

Let me know if you have any questions or would like any estimates! Stay healthy!

by Andrew Augustyniak