The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
The federal agency tasked with protecting consumers from financial distress as a result of troublesome lending practices recently issued a proposal to change mortgage rules, but has drawn significant fire for it.
However, unlike most criticism of the federal Consumer Financial Protection Bureau’s proposed regulatory changes, these voices are not those of the lending industry, but rather from Americans the agency is supposed to protect, according to a report from the political news site The Hill. A number of consumer advocacy groups have noted that the CFPB’s latest rule still allows lenders to continue participating in a number of troubling practices that make it more difficult for borrowers to keep their homes.
The most upsetting practice for these groups, which is known in the industry as “dual tracking,” allows lenders to continue evaluating a homeowner’s options for obtaining a mortgage modification while still moving toward foreclosure, the report said. The CFPB’s proposed rule allows this to continue, but the lender or servicer cannot foreclose on the home without having first officially considered the benefits of a modification. However, groups such as the Center for Responsible Lending and the National Consumer Law Center say that more can be done.
“If somebody is sending in their paperwork and applying … the servicer can continue going ahead with the foreclosure process – like having the court declare a person is in default, setting the date for the foreclosure sale,” Michael Calhoun, president of the Center for Responsible Lending, told the site. “That just cuts it way too close.”
Instead, these groups would prefer that the rule require servicers to stop all foreclosure proceedings once a borrower seeks a modification of any kind, and that efforts to seize the property should only resume when all other options have been exhausted, the report said. Another potential problem is that borrowers are given the right to dispute potential errors, but if a home is already sold, there is little to be done about those complaints.
The CFPB has generally received high praise from consumer advocacy groups for its efforts to increase protections for borrowers on many types of loans, including credit cards and mortgages. Fortunately for borrowers, the proposed rule won’t be finalized for until 2013, so there may still be time to alter the language contained therein.
Image: 401(K) 2012, via Flickr
March 11, 2021
Personal Finance
March 1, 2021
Personal Finance
February 18, 2021
Personal Finance