Last week, the Consumer Financial Protection Bureau issued two announcements of interest to servicers as they continue to respond to borrowers impacted by the COVID-19 pandemic.
Consumer Complaint Report:
On May 21, the CFPB issued a report analyzing approximately 4500 complaints relating to the COVID-19 pandemic. Among other findings, the report indicates that approximately 22 percent of COVID-19 related complaints addressed mortgages; inability to pay appeared as the most common issue.
The report’s observations include that consumers:
- complained about being unable to reach customer service representatives, or having access to methods other than telephone contact to discuss payment options;
- indicated concerns about potential negative credit reporting implications of alternative payment options; and
- indicated concerns about repayment options at the end of a forbearance period, particularly whether a lump-sum or balloon payment would be required.
No-Action Letter Template:
On May 22, the CFPB issued a No-Action Letter Template permitting mortgage servicers who are seeking to engage in loss mitigation activities with consumers. The template, requested by Brace Software, Inc., would permit servicers to use Brace’s online platform (an online version of Fannie Mae Form 710) to implement loss mitigation efforts. According to the CFPB’s announcement, digitizing the loss mitigation application process may improve its operation.
The No-Action Letter is the latest example of the CFPB’s use of the No-Action Letter Policy announced in September 2019 as part of the CFPB’s effort to promote innovation and facilitate compliance.
Taken together, these two announcements are indicative of the Bureau’s continued focus on the impact of COVID-19 on borrowers, and on how servicers are responding to borrower needs.