On November 10, 2021, Federal Regulators issued a statement
that lenders will no longer be afforded leniency with complying with mandatory mortgage
servicing practices.
As background, Federal Regulators had previously issued an
April 2020 Joint Statement, in response to COVID, that they would not take
supervisory or enforcement action against mortgage servicers for failing to
meet certain borrower-protective timing requirements so long as the servicers
made good faith efforts to provide those required notices or disclosures and
took the related actions within a reasonable period.
Now, as of November 10, 2021, Agencies will apply their
respective supervisory and enforcement authorities, to address noncompliance or
violations of Regulation X’s mortgage servicing rules.
Borrowers, who are looking for leverage in negotiating
mortgage modifications, short sales, and deed-in-lieu workouts should be
brushing up on Regulation X today.
