The CFPB recently issued a request for public comment on mortgage refinances and forbearances. The CFPB is seeking information regarding 1) ways to facilitate mortgage refinances for consumers who would benefit from refinancing, especially consumers with smaller loan balances; and 2) ways to reduce risks for consumers who experience disruptions in their financial situation that could interfere with their ability to remain current on their mortgage payments. Comments must be received by November 28, 2022.
The CFPB’s request for comment is based in part on differences in rates of refinancing among Black, Hispanic, and rural homeowners, who tend to have lower rates of refinancing. The CFPB is requesting information on possible barriers to refinancing among these groups and ways to increase access to refinance opportunities through targeted and streamlined refinance programs. The CFPB also expressed interest in new refinancing products, such as offers to reduce closing costs for future refinances with the same creditor or loans that would automatically trigger an offer to refinance. The CFPB would like additional information on the potential risks and benefits if creditors were to develop and offer new products with these or similar features.
The CFPB is also requesting information on the actions the CFPB or others could take to mitigate the financial effects of natural disasters and other temporary hardships on borrowers. The CFPB specifically noted the success of COVID-19 forbearance programs, which helped 8.2 million borrowers mitigate short-term losses due to the pandemic. The CFPB would like additional comments on developing other streamlined short and long-term loss mitigation strategies for borrowers with mortgages impacted by temporary financial hardship.