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The National Consumer Law Center (NCLC) has called on the Consumer Financial Protection Bureau (CFPB) to resolve the issue of “successor homeowners” that receive residential properties through inheritance or divorce, but encounter problems from mortgage servicers that are either unable or unwilling to work with the new homeowners.
The NCLC advocated a speedy enforcement of the CFPB’s proposed servicing rules that mandate servicer compliance once successors have documented their status as property owners. According to its new report “Snapshots of Struggle: Saving the Family Home after a Death or Divorce,” the NCLC cited multiple cases of servicers that failed to honor existing modifications and refused to process new modification requests following the departure of the original borrower. The report also singled out servicing challenges faced by domestic violence survivors trying to save their homes.
“It is urgent that the Consumer Financial Protection Bureau quickly finalize and implement its proposed rule to ensure these families, many already reeling from tragedy and trauma, may remain in their homes,” said National Consumer Law Center Attorney Alys Cohen, who authored the report.