Some of the consumer protection regulations that govern how mortgage companies offer borrowers home-retention options will be simplified in line with responses to a proposal issued last September.
"The CFPB will be using this input from commenters to propose ways to simplify and streamline mortgage servicing rules," Rohit Chopra, director of the Consumer Financial Protection Bureau, said in a blog published Thursday.
Feedback Chopra found compelling centered on frustration with the complexity of the process.
"Many commenters noted that borrowers seeking help on their mortgages can face a paperwork treadmill," he said.
Extra costs and damage to credit records resulting from delays were a particular gripe, Chopra noted.
"Commenters also expressed concern that borrowers often incur servicing fees and experience negative credit reporting while waiting for their mortgage servicers to review their options," he said.
Chopra did not confirm the extent to which the CFPB would take up its earlier proposal but said the bureau would be shaping its revisions with consideration for both the mortgage industry and consumers.
"When homeowners who struggle to make payments get the help they need without unnecessary delay or hurdles, it is better for borrowers, servicers and the economy," he said.
Concepts in the CFPB's proposal included potentially extending temporary forbearance options allowed during the pandemic for permanent use and making refinance options simpler to access.
Chopra also said there would be certain guardrails around what the bureau would be willing to do.
"We will propose streamlining only if it would promote greater agility on the part of mortgage servicers in responding to future economic shocks while also continuing to ensure they meet their obligations for assisting borrowers promptly and fairly," he said.
