Mortgage Firms Warned to Prepare for a ‘Tidal Wave’ of Distress
- CFPB says it may punish servicers that fail to help borrowers
- Companies must act to prevent ‘avoidable’ foreclosures: CFPB
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Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said Thursday.
The Consumer Financial Protection Bureau warning is tied to forbearance relief that’s allowed million of borrowers to delay their mortgage payments due to the pandemic. To avoid what the bureau called “avoidable foreclosures” when the relief lapses, mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.