The Consumer Financial Protection Bureau Orders More Relief for Homeowner’s Forbearance and Loan Modifications.

Taking effect July 1, the CFPB has instructed mortgage lenders to waive the requirement that loan modifications only be extended to customers who have submitted a complete loan modification application. Borrowers facing temporary hardships would benefit from a quicker and more efficient application process.

The new rule would allow mortgage servicers to extend relief sooner if they meet certain criteria that benefit struggling borrowers during the COVID-19 emergency.

To qualify for the exemption during the pandemic, mortgage servicers must meet three criteria. Servicers must allow a borrower who became delinquent to delay all principal and interest payments; refrain from charging any fees or accrued interest while the relief is in place; and ensure that acceptance of a loan modification offer resolves the borrower’s delinquency status.