Way Signs "Bailout - Collapse"In an announcement Thursday afternoon, the Consumer Financial Protection Bureau said it will engage in additional foreclosure protection to consumers. The announcement comes on the heals of a recorded $16 Billion record settlement by Bank of America for violations in failing to resolve its claims related to its toxic mortgages leading up to the financial crisis.

Among the proposed rules would be a requirement that servicers actively participate in extending additional loss mitigation options to its borrowers in crisis. Those targeted are consumers that brought their loans current during the mortgage crisis, either through a loss mitigation option or otherwise, but are still struggling.  Those who obtained permanent loan modifications and have made payments as required, but have suffered an unexpected death of a spouse, medical bills or otherwise, will be targeted for assistance.

Mortgage Heirs.  Equally as important, are the excluded class, that has struggled so hard to obtain loss mitigation options, after the death of the mortgagor, but has faced probate hurdles, with lenders excluding them since they did not sign the note or mortgage.  Mortgage heirs, or successors in interest of the properties left behind by mothers, fathers, deceased spouses, or property transferred through a family trust, or through death of a joint tenant, will be afforded additional protection.  The lenders will be required to work with them to identify and communicate about possible loss mitigation options available to ensure the heirs receive foreclosure protection.

Divorced spouses.  Property transferred through a divorce settlement, wherein one spouse wants to keep the house and is unable to due to the loss of income from the other spouse, will also be afforded protection under the proposed measures.

Additional safeguards are also proposed to ensure lenders work with borrowers once the loss mitigation applications are received. Included in such protections, which has been the center of much complaints over the years since the Making Home Affordable Program began are:

Loan Service Transfers during a pending loan modification.  Under the proposed plan, borrowers will need to be timely notified of any service transfer when the loss mitigation applications are in process or complete. If completed and approved, the new servicer would be required to evaluate it within 30 days of receipt.  If incomplete, other safeguards will be put in place.  For involuntary transfers to new servicers, the new servicer would have 15 days to evaluate it from transfer.

Bankrupt Borrowers.  Servicers will be required to provide early intervention notices to let borrowers know of their options prior to filing for bankruptcy.

And perhaps the greatest proposed measure:

Stalling a foreclosure during the pendency of a loan modification application. This seems to be the number one misconception for many borrowers, particularly the elderly, and non-native Americans, or Hispanics, who are under the false impression that applying for a modification will stop or stall the initiation of a foreclosure.  While measures and protections were already in place with prior CFPB regulations, lenders often failed to follow them.  The proposed CFPB measures will more strictly monitor this requirement to make sure lenders take adequate steps to work with borrowers so that wrongful foreclosures are not initiated, costing millions of dollars in attorneys fees, and costs, for wrongfully initiated foreclosures.

A full summary of the proposal can be found on the Consumer Financial Protection Bureau website.  The rules and disclosures are open for public comment for 90 days after publication in the Federal Register.

For additional information, call attorney Jacqueline A. Salcines, Esq.  We are well versed in all the Consumer Financial Protection Bureau rules and regulations as well as hold lenders accountable for their loss mitigation violations.  We work closely with consumers to make sure they are qualified for the type of loss mitigation program they desire,  and then work zealously to obtain those goals on behalf of the consumer client.

Call us today for a free consultation to see if you qualify for a loss mitigation program.


Home floating on a life preserver.Beginning January 2014, new CFPB (Consumer Financial Protection Bureau) rules to protect homeowners and consumers shopping for home mortgages went into effect.  The rules sharply reduce the runarounds and stalling techniques frequented by the banks for both sort sales and loan modifications under the HAMP Making Home Affordable Program.

Virtually every mortgage now issued will be subject to these new rules. The rules set up a new type of mortgage referred to as a “Qualified Mortgage” which determine borrower eligibility to repay, prior to giving the loan.  It considers such factors as borrower income, assets, debt and credit history.

For borrowers seeking Loan Modifications, there are added protections as well.  Mortgage servicers will now have to call or contact the borrowers by the time they are 36 days late on their mortgage.  The borrower can not initiate a foreclosure until 120 days delinquent and by that time, should have already offered certain options to the delinquent borrower with regard to loss mitigation.

Mortgage servicers can also not start a foreclosure while they are working on a submitted application for modification.  This is an incredible win for homeowners in distress that are legitimately and diligently pursuing modifications due to financial hardships out of their control.

If the loan modification is denied, the lender must provide clear and concise information as to why it was denied, sent to the borrower explaining the reason for rejection.

Congress created the CFPB to make sure “financial markets work for the consumer”  For more information you can contract the CFPB at (855) 411-2372 or contact us at the Law Offices of Jacqueline A. Salcines, PA

We process loan modifications, short sales as well as loan settlements and other loss mitigation options for our clients. We know how to put the new rules and regulations to work for you so that you don’t lose your home due to the banks runarounds.

Call today. The first consult is always free of charge and can provide you with peace of mind.




TEL:  305.669.5280