Market Update April 14, 2021

HE NEW MORTGAGE PROTECTION FOR THOSE IN FORBEARANCE

A brand new proposal issued by the Consumer Financial Protection Bureau, is expected to kick in by August 31st of this year (open to public comment). It lays out new rules which mortgage servicers must follow. Here’s a quick rundown:
1. Available for primary residences only
2. “Loss Mitigation” review with lender to avoid foreclosure
3. New loan available: Unpaid mortgage payments and remaining mortgage wrapped up together in brand new 40 year mortgage, no rate increase!!
4. No fees or interest on unpaid balance for as long as forbearance period is active
5. Must be made available to borrowers “experiencing a COVID-19 related hardship.” (“hardship” is undefined)
6. Foreclosures delayed by 120 days – extra time to find alternatives to foreclosure

While it’s to early to tell what will happen to this proposal, it will undoubtedly worsen the available scarce housing inventory.