FHFA and CFPB Announce Borrower Protection Program
April 15, 2020
The Federal Housing Finance Authority (FHFA) and the Consumer Financial Protection Bureau (CFPB) have jointly launched the Borrower Protection Program. The two federal agencies say it is necessary to provide accurate information to consumers about their forbearance options.
Under the program, the CFPB will make complaint information and analytical tools available to FHFA via a secure electronic interface; and FHFA will make available to the Bureau information about forbearances, modifications and other loss mitigation initiatives undertaken by Fannie Mae and Freddie Mac.
CFPB Director Kathleen L. Kraninger said in a news release, “Through the partnership, the Bureau will share our insights with FHFA and ensure we get their data on how mortgage servicers are working with their customers during this critical time and going forward." FHFA Director Mark Calabria added, “This partnership with CFPB ensures FHFA can address misconceptions stemming from consumer complaints by working with Fannie and Freddie servicers."
In response to the COVID-19 national emergency, Fannie Mae and Freddie Mac permitted borrowers the ability to enter into forbearance, a pause or reduction in their monthly mortgage. The missed payments will have to be paid back by the borrower. The missed payments can be added to the normal monthly payments, paid back all at once, tacked on to the end of the loan, or the borrower can have the term of the loan extended.
A survey earlier in the week conducted by the Mortgage Bankers Associaiton (MBA) found the number of loans in forbearance jumped from 2.73 percent to 3.74 percent during the week of March 30-April 5, 2020.
The National Consumer Law Association is urging borrowers to call their lenders before taking on forbearance. Industry professionals have repeatedly said there is a difference between forbearance and forgiveness, a concept many homeowners are still very unaware of.
Read more about the federal borrower protection program.
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