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The Federal Housing Finance Agency made it clear that Fannie Mae and Freddie Mac servicers are not permitted to make first notice or filing for foreclosure, which would be prohibited by the Consumer Financial Protection Bureau protections for borrowers affected by COVID-19 before the CFPB rule takes effect.
“The COVID-19 pandemic has created many financial challenges for families. Through no fault of their own, many of these families had to rely on COVID-19 forbearance to stay safe in their homes during the pandemic. Today, many families' finances are improving allowing them to exit forbearance. The protections FHFA is putting in place today will protect vulnerable families as they begin their financial recovery from the impact of the COVID-19 pandemic,” said acting director Sandra L. Thompson, in an announcement from the FHFA.
Earlier this week the CFPB announced a new rule that made it mandatory for servicers to redouble their efforts to avoid foreclosure for borrowers affected by the COVID-19 pandemic. It prohibits servicers from making first notice or filing for forclosure in most cases under the rule before Dec. 31, 2021.
The CFPB's final rule will take effect Aug. 31, 2021. The Enterprises' moratoriums on single-family foreclosures and real estate owned (REO) evictions will expire on July 31, 2021. This requires Enterprise servicers to follow the CFPB's new protections a month before the CFPB rule takes effect will protect borrowers from foreclosure and provides certainty for servicers about Enterprise expectations.