Mortgage

CFPB, DOJ issue warning for mortgage servicers about military families

CFPB, DOJ issue warning for mortgage servicers about military families
Written by Publishing Team

The Consumer Financial Protection Bureau and the Department of Justice have drafted a joint letter to mortgage officers, reminding them of their obligations to military families and veterans exiting forbearance plans.

In particular, active-duty military families enjoy additional protection under Military Civil Relief Act Other than those mentioned by Congress when it created the COVID Pandemic Endurance Program in CARES lawstated in the letter of the federal agencies.

“the Illegal foreclosures of military families CFPB Director Rohit Chopra said in a press release: The recent crisis was one of the financial industry’s worst failures. “The CFPB will closely monitor mortgage workers and hold them accountable for the illegal tactics committed against the military’s families.”

A separate letter has been sent to landlords and other housing providers to remind property owners Legal protection for military tenants.

A CFPB spokesperson said a total of 70 letters were sent, including to the 50 largest mortgage providers, as well as the largest VA secured loan providers.

“As evidenced by our sending this letter to many service workers, particularly the largest VA loan providers, we have taken this step with the Department of Justice to make sure that all service members and their families are not put at risk and have all the amenities,” a law spokesperson said. “For the past year, the Canada Citizens Protection Bureau (CFPB) has been actively working to ensure that families affected by the pandemic are not being illegally expelled or prevented, and the message is a continuation of that work.

The agency declined to reveal the number of complaints lodged or servants involved, and a separate letter was sent to landlords and other housing service providers reminding property owners of Legal protection for military tenants.

The National Association of Military Families is “extremely pleased” that the two agencies are reminding both mortgage workers and landlords of their obligations under SCRA.

“We hope this will avoid any problems in the future,” said Kelly Hruska, NMFA’s director of government relations. “If not, they were definitely notified.”

Credit reporting errors have been difficult to correct for several years. “If we can be proactive to help ensure these things don’t happen, it will help families in the long run,” Hruska said.

The organization heard more complaints about landlord-tenant issues than problems with mortgage lenders. Even before the pandemic, Hruska noted, landlords were asking military families on their leases to waive their rights to SCRA, which while not illegal, is not ethical.

“We worked hard to make sure that protection was in place,” Hruska said. “When landlords violate that, and ask service personnel to willingly waive those rights, it is especially troublesome.”

The agency stated that 1.25 million borrowers remain in the Sabr program, many of them from military families. (The latest data from the Black Knight puts the number in Under 900,000 active plan overall.)

Active duty and veteran families have filed complaints about potential mortgage service abuses, including inaccurate credit reports, misleading borrower communications, and lump sum payments required to return their mortgage loans.

“Such actions, if valid, would be a violation of legal protections under the CARES Act or conflict with administrative guidance issued by the Federal Housing Agencies,” said the letter, signed by Chopra and Kristen Clark, the assistant attorney general for civil rights. . “The CFPB is currently reviewing these complaints to determine if further investigations are warranted.”

In June, put down CFPB final rule About how to proceed with foreclosures with impatient borrowers.

The letter of service also clarified foreclosure protections for active duty military personnel under the SCRA and those that apply in both judicial and nonjudicial states.

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