The Consumer Financial Protection Bureau is proposing a new set of rules for lenders to follow that intend to help homeowners avoid foreclosure, the Associated Press reported. The proposal comes in the wake of Congress demanding changes to the problematic industry.
The rules would require mortgage servicers to provide homeowners with monthly statements and warnings about changes to interest or insurance rates to ensure that they are aware of their standing. Under the proposed legislation, once a borrower falls into distress, mortgage servicers must make a “good-faith” effort to contact the client and offer them options to avoid losing their home.
Finally, as required by the $26 billion mortgage settlement finalized last week, the new rules mandate better record-keeping and foreclosure counseling.
The bureau hopes to finalize the proposal by the summer and enact it by the beginning of next year. [AP via NYT]