New Regulations Help Pause Foreclosures: NCLR
Borrowers at risk of losing their homes have been granted much-needed relief thanks to new protections aimed at preventing unnecessary foreclosures. Earlier today, the Consumer Financial Protection Bureau (CFPB) announced new servicing standards that specifically address the problem of dual tracking—the process of pushing families through foreclosure while they are simultaneously being considered for mortgage loan modifications. At a hearing inAtlantathis week, Lot Diaz, Vice President of Housing and Community Development at NCLR (National Council of La Raza), provided testimony that praised the CFPB for making meaningful improvements to the dual tracking rule, which will help stem foreclosures in Latino communities.
“There is no question that our community has been disproportionately affected by the foreclosure crisis and that dual tracking has played a significant role in so many Latinos unfairly losing their homes,” said Diaz. “Mortgage servicers have been starting the clock on foreclosures before families even have a chance to consider their options for saving their homes. The new regulations are a clear step in the right direction, and it’s time that servicers follow the rules.”
The most promising provision in the new regulations prohibits servicers from filing for foreclosure until a mortgage is delinquent for more than 120 days. This window of opportunity provides a healthy amount of time for struggling homeowners to adjust their loans without having to worry that their foreclosure is already being processed.
While NCLR is pleased that the CFPB has responded to many of our concerns about the dual tracking rule, they have not clarified how they intend to disseminate information about the rule to local communities. In addition, it is critical that racial and ethnic data are collected to ensure accountability and proper enforcement.
“We’ve already seen servicers ignore the calls to end dual tracking,” added Diaz. “We need to make sure this time that what is put on paper is put into practice. Strong enforcement is key.”