Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, sent two letters to federal agencies and banking regulators urging them to strengthen foreclosure and mortgage servicing protections for borrowers and provide greater oversight to prevent unnecessary foreclosures during the pandemic.
In a letter to the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA), Congresswoman Waters calls on housing agencies to protect homeowners.
“I write to highlight the gap in foreclosure protections beginning on August 1, the day after the federal foreclosure moratorium expired and August 31, when CFPB’s foreclosure protections rule come into effect,” wrote Chairwoman Waters. “The month-long gap in protections leaves communities vulnerable to foreclosure, especially Black and Latinx homeowners who have been disproportionately affected by the pandemic-induced economic downturn. Therefore, it is important for your agencies to take additional steps to prevent unnecessary foreclosures during this critical time.”
In a letter to the Consumer Financial Protection Bureau (CFPB), the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Conference of State Bank Supervisors, Congresswoman Waters calls on banking regulators to update their guidance to protect borrowers and provide strong oversight of mortgage servicers.
“I call on your agencies to immediately update your Joint Statement on Supervisory and Enforcement Practices Regarding the Mortgage Servicing Rules in Response to the COVID-19 Emergency and the CARES Act from April 3, 2020 and take other steps to provide vigorous oversight and encourage mortgage servicers to work with borrowers to avoid unnecessary foreclosures,” wrote Chairwoman Waters. “Providing clear guidance to mortgage servicers and enhancing supervision and enforcement during this period is critical to safeguarding homeowners from unnecessary foreclosures, especially before the CFPB rule goes into effect on August 31, as well as before critical housing counseling funds and Homeowner Assistance Funds provided through the American Rescue Plan Act have reached communities and stabilized households.”
The full text of the letter to HUD, VA, USDA is available here.
The full text of the letter to CFPB, Federal Reserve, FDIC, NCUA, OCC, and Conference of State Bank Supervisors is available here.
These letters serve as a follow up to a June 21, 2021 letter from Chairwoman Waters to HUD, VA, USDA, CFPB, and FHFA, urging them to administratively extend their moratoria on foreclosures at least until the CFPB is able to finalize and implement its pandemic recovery mortgage servicing rule. The June letter also called on the CFPB to strengthen and finalize its mortgage servicing rule to better protect homeowners by ensuring they have an opportunity to finalize affordable loan modifications with their lender and prevent unnecessary foreclosures.