Mortgage Firms Face Foreclosure Ban Until 2022 Under CFPB Plan

Red house among white houses

Agency proposal aimed at helping consumers exiting forbearance.

April 5, 2021
Alex Wittenberg - Bloomberg

Millions of homeowners who’ve fallen behind on mortgage payments due to the pandemic would have more time before facing foreclosure under rules proposed Monday by the Consumer Financial Protection Bureau.

The revamp would generally prohibit mortgage servicers from starting foreclosures until after Dec. 31, the CFPB said in a statement. The goal is to give the nearly 3 million borrowers who’ve delayed or stopped making payments a chance to resume them before lenders initiate forced home sales.

A key reason why the CFPB said the change is necessary is because an estimated 1.7 million consumers will exit U.S. forbearance relief programs in September and the ensuing months, meaning they will have to start making payments again.



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