Federal Agency Releases New Rules for Foreclosures

Feds release new guidelines to protect consumers facing foreclosure.

Federal Agency Releases New Rules for Foreclosures


The Consumer Financial Protection Bureau released new guidelines for mortgage servicers on Thursday that set out to help protect home owners who may be facing foreclosure. 

CFPB Director Richard Cordraysays the new rules are aimed at trying to prevent “unnecessary foreclosures” as well as “ensure fair treatment for all borrowers and establish strong protections for those struggling to save their homes.” 

Among the CFPB’s new guidelines: 

  • Mortgage servicers are prohibited from foreclosing on a home owner who is seeking loan modifications. Servicers will be unable to file a foreclosure notice until a home owner is at least 120 days behind on a mortgage payment. 
  • A foreclosure sale on the home will be prohibited until alternatives are considered. Servicers will be required to give home owners adequate time to accept an alternative to foreclosure before going ahead with a foreclosure sale. Servicers must respond to loan modification requests from home owners who apply for a loan modification at least 37 days prior to a foreclosure auction. 
  • When a home owner has missed two consecutive payments, servicers are required to send a written notice of foreclosure alternative examples to the home owner, such as deferred payments and loan modifications. 
  • Servicers must be easily accessible to the home owners for assistance. 
  • Servicers will be required to publish more clear mortgage statements, which includes mortgage payments broken down by principal, interest, fees, and escrow as well as includes the amount and due date of the next payment. 
  • Servicers must notify home owners early about any interest rate changes to their mortgage payments. 
  • Servicers will be required to credit a home owner’s account on the date a payment arrives. 

The new rules take effect January 2014. 


Contributed by Diane Eddy-Low, Realtor since 1999

Hermann London Group 314-602-7174

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.


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