Moratoriums Extended, Debt Collections Rule Date, & New Tool

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Today, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac are extending the moratorium on single-family real estate owned (REO) evictions until Sept. 30, 2021. This REO eviction moratorium applies to properties that have been acquired by Fannie or Freddie through foreclosure or deed-in-lieu of foreclosure transactions.

The current moratorium was set to expire on July 31, 2021.  

The REO eviction moratorium is just the latest step FHFA has taken to benefit homeowners, renters, and the mortgage market during the pandemic. FHFA continues to monitor the effect COVID-19 has on borrowers, Fannie and Freddie, their counterparties, and the mortgage market. FHFA may revisit its policies based on updated data and health risks.

Homeowners and renters can visit consumerfinance.gov/housing for up-to-date information on their relief options, protections, and key deadlines.​

FHA Also Extends Foreclosure and Eviction Moratorium
Additionally, the Federal Housing Administration (FHA) announced an extension today of its moratorium on evictions for foreclosed borrowers and their occupants through Sept. 30, 2021, and noted the expiration of the foreclosure moratorium on July 31, 2021.

This extension is part of President Joe Biden’s announcement on July 29 that federal agencies will use their authority to extend their respective eviction moratoria through the end of September, which will provide continued protection for households living in federally-insured, single-family properties. FHA’s eviction moratorium extension will avoid displacement of foreclosed borrowers and other occupants who need more time to access suitable housing options after foreclosure.

With today’s announcement, mortgage servicers must continue to halt evictions for FHA Single Family Title II forward and Home Equity Conversion Mortgage (HECM) foreclosed properties, except for those properties that are legally vacant or abandoned.

Mortgage servicers may initiate or continue foreclosures in accordance with FHA requirements once the Single Family foreclosure moratorium expires as planned on July 31, 2021, but may not evict a foreclosed borrower or other occupant.

CFPB Confirms Effective Date for Debt Collection Final Rules
The Consumer Financial Protection Bureau (CFPB) today announced that two final rules issued under the Fair Debt Collection Practices Act (FDCPA) will take effect as planned, on Nov. 30, 2021. The CFPB issued a proposal in April 2021 that, if finalized, would have extended the effective dates to Jan. 29, 2022.  The CFPB has now determined that such an extension is unnecessary. Following this announcement, the CFPB will publish a formal notice in the Federal Register withdrawing the April 2021 proposal.

The CFPB proposed extending the final rules’ effective date by 60 days to allow stakeholders affected by the COVID-19 pandemic additional time to review and implement the rules. The public comments generally did not support an extension.  Most industry commenters stated that they would be prepared to comply with the final rules by November 30, 2021. Although consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules.  The alternative basis for an extension that many commenters urged, a reconsideration of the rules, was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act. Nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date.

Two final rules under the FDCPA will take effect in November. The first rule, issued in October 2020, focuses on debt collection communications and clarifies the FDCPA’s prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The second rule, issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. The second rule also prohibits debt collectors from suing or threatening to sue consumers on time-barred debt. Additionally, the second rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.

The CFPB is committed to informing consumers about their rights and protections under the rules and assisting debt collectors in implementing them. Consumer education materials on debt collection and resources to help debt collectors understand, implement, and comply with the rules are available through consumerfinance.gov. 

The CFPB will consider additional guidance for debt collectors, including those that service mortgage loans, as necessary. The CFPB recognizes that mortgage servicers are expected to receive a potentially historically high number of loss mitigation inquiries in the fall as large numbers of borrowers exit forbearance and that, as a result, mortgage servicers in particular may face capacity constraints.  The CFPB will continue to work with all market participants to ensure a smooth and successful implementation.

CFPB: Your CU Can Help Renters and Landlords
The Consumer Financial Protection Bureau (CFPB) has released an online tool to help renters and landlords impacted by the pandemic easily find and apply for payment assistance for rent, utilities and other expenses.

The bureau held a demonstration webinar on Wednesday morning.

This new Rental Assistance Finder connects renters and landlords with the state and local programs that are distributing up to $46 billion in federal assistance nationwide to help renters stay housed during the pandemic.

According to a CFPB analysis of recent U.S. Census Household Pulse Survey data, 16 percent of adults living in households who rent said they are currently behind on their payments. Of adults living in households behind on rent, 49 percent (approximately 3.6 million) say that eviction in the next two months is somewhat or very likely.

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