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CUNA: New CFPB Foreclosure Measures Will Add to Regulatory Burden
Friday, August 5, 2016 6:45 AM

New measures finalized Thursday by the Consumer Financial Protection Bureau on foreclosures are concerning to Credit Union National Association due to potential increased regulatory burdens for credit unions.

In analyzing the changes, CUNA says early analysis shows that provisions concerning successors in interest, as well as bankruptcy periodic statements, will add to the regulatory burden already facing credit unions.

Successors in interest are defined as individuals who inherit or receive property when there is an outstanding mortgage loan on the property. The final rule establishes a broad definition of successor in interest that generally includes persons who receive property:

  • Upon the death of a relative or joint tenant;
  • As a result of a divorce or legal separation;
  • Through certain trusts; or
  • From a spouse or parent.

CUNA met with the CFPB in March to discuss successors in interest, believing the rule will result in operational challenges for servicers, particularly with regard to accurately confirming the status of a successor in interest.

Another measure requires generally that mortgage servicers provide borrowers in bankruptcy periodic statements with specific information tailored for bankruptcy, as well as a modified written early intervention notice to let those borrowers know about loss mitigation options.  

Most provisions will be effective within 12 months of publication of the rule in the Federal Register, while the bankruptcy statement provisions generally are effective 18 months of publication.