Consumer Financial Protection Bureau Proposes New Restrictions on Mortgage Servicers Before Commencing Foreclosures

Financial Services attorneys Leonard Bernstein, Bob Jaworski and Rolland Hampton and Consumer Protection Defense and Compliance attorneys Kwamina Thomas Williford and Brian Goodrich co-authored an article included in Pratt's Journal of Bankruptcy Law about the Consumer Financial Protection Bureau's (CFPB) proposed rule to enhance protections for struggling mortgage borrowers. The proposed rule would require servicers to exhaust all loss mitigation options before initiating foreclosure proceedings, prohibit dual tracking, limit certain fees and expand communication requirements. The authors discuss the key provisions of the proposed rule, including the new "loss mitigation review cycle" concept, expanded definitions of requests for assistance and additional language accessibility requirements. They also highlight potential impacts on servicers and the mortgage industry.

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