The Consumer Financial Protection Bureau (CFPB) is making good on its threats, and is reportedly opening probes into several mortgage servicers.
The probe is due to the servicers’ handling of forbearance requests, three people with knowledge of the matter told Reuters.
“We are very concerned and we’re watching closely,” one of the people told Reuters. “Our supervision team is robustly asking for more data than ever from servicers.”
This move comes as the Biden administration continues to place more emphasis on overseeing servicers during this period as borrowers begin to exit their forbearance plans.
The CFPB recently proposed a new rule that would prevent foreclosures for the remainder of 2021 in order to allow ample time for a review period. Before that, the CFPB told servicers to get prepared, because not being ready would not be a good enough excuse for not doing everything they could to prevent a foreclosure wave. It promised to be watching and threatened consequences.
“The nation has endured more than a year of a deadly pandemic and a punishing economic crisis,” CFPB Acting Director Dave Uejio said when he proposed the new rule. “We must not lose sight of the dangers so many consumers still face. Millions of families are at risk of losing their homes to foreclosure in the coming months, even as the country opens back up.”
The share of mortgages in forbearance continues to retreat from last summer’s highs, but approximately 2.3 million homeowners are still taking a hiatus from their monthly mortgage payments, according to the latest numbers from the Mortgage Bankers Association (MBA).
According to Reuters’ sources, the CFPB is looking at several issues: how many and which borrowers are in forbearance, whether loan modifications will succeed in getting borrowers repaying, if servicers have been obstructing or delaying forbearance requests or granting only partial relief and if some servicers have been discriminating against borrowers based on race or ethnicity, whether deliberately or inadvertently.