CFPB Releases New Resources for Consumers

The Consumer Financial Protection Bureau (CFPB) recently released additional resources for consumers as part of its campaign to educate the public about the new protections provided by the CFPB’s new mortgage rules which went into effect on January 10, 2014.

The CFPB’s new mortgage rules protect consumers by requiring that mortgage lenders evaluate whether borrowers can afford to pay back the mortgage. The rules also establish new, strong protections for struggling homeowners, including those facing foreclosure, and ensure that borrowers are protected from costly surprises and delays by lenders.

The CFPB Bureau has released a number of educational materials to improve consumer understanding of the new rules and their protections. These materials include:

• Sample Letters: The CFPB has released sample letters that consumers can send to lenders when problems arise.

• Mortgage Tips: The CFPB provides a number of different tips on new rights under the new rules for homebuyers and homeowners at every stage of the mortgage process—from taking out a loan to paying it back. The tips also include recommendations for troubled borrowers facing foreclosure.

• Answers to Consumer Questions: The CFPB provides answers to mortgage-related questions through AskCFPB, an interactive online tool designed to answer consumers’ most frequently asked questions in plain language.

• Consumer Tools: The CFPB website offers a tool to help consumers find local housing counseling agencies to answer their questions or address their concerns. Consumers that have an issue with consumer financial products or services, such as a mortgage, can also submit a complaint.

• Fact sheets on the Rules: The CFPB offers a fact sheet with an overview of the new consumer protections in the CFPB’s mortgage rules. The CFPB also offers a summary of the new procedures to facilitate borrowers’ access to foreclosure avoidance options.

Print copies of the mortgage materials will be available in seven languages: Spanish, Tagalog, traditional Chinese, Haitian Creole, French, Korean, and Vietnamese. English language materials can be found at consumerfinance.gov/mortgage.

Over the next year, the CFPB will continue to produce materials to educate consumers about the new mortgage rules and we will keep you informed about these changes. Or if you have any questions, please feel free to contact Garland Griffiths Knaupp at (503) 846-0707  for a one-hour consultation.

CFPB Releases New Mortgage Rules Resources for Consumers

On January 10, 2014, the Consumer Financial Protection Bureau (CFPB) released new mortgage rules designed to provide homeowners and consumers with new rights and greater protections from many of the harmful lending practices that led to the recent mortgage crisis and attendant financial collapse.

Virtually every mortgage a lender makes must now be evaluated, first and foremost, on the borrower’s ability to repay the loan. This means that the borrower must be able to repay the loan for years, not just during the first few months when a “teaser” interest rate keeps monthly payments low.  These new mortgages will be referred to as “Qualified Mortgages” or “QMs.” QMs are designed to be safer and easier to understand than the loans that lead to the recent financial crisis. New CFPB rules also limit the points and fees lenders can charge for making a QM.

There are a number of other rules designed to safeguard consumers from predatory lending practices. These rules include, but are not limited to, the following:

• Mortgage lenders and servicers are required to send you a clear monthly statement so you can see how they are crediting your payments.

• Mortgage lenders and servicers are required to fix mistakes promptly.

• Mortgage lenders and servicers are required to credit payments the day they get them.

• Mortgage lenders and servicers are required to give you early notice if you have an adjustable rate mortgage and your interest rate is about to change.

• Mortgage lenders and servicers are required to call or contact borrowers by the time they are 36 days late on their mortgage.

• With limited exceptions, mortgage lenders and servicers cannot initiate a foreclosure until the borrower is more than 120 days delinquent.

• Mortgage lenders and servicers cannot start a foreclosure while they are also working with a homeowner who has submitted an application for a loan modification or other alternative for help.

• Mortgage lenders and servicers are required to advise borrowers who fall behind on their mortgages of all of the workout options available to them.

• Mortgage lenders and servicers are required to explain to a borrower why a mortgage modification was denied.

Taking out a mortgage is arguably one of the most important decisions a consumer will make. The new CFPB rules are designed to make sure that consumers have the knowledge and protections necessary in order to make sound decisions about their financial futures.

If you feel that your lender or servicer has violated any of these rules, please feel free to contact Garland Griffiths Knaupp at (503) 846-0707  for a one-hour consultation or visit the CFPB website at http://www.consumerfinance.gov for more information.

It is very important to contact an attorney as early in the process as possible to protect your rights as a consumer.  If you think you have been harmed, you may have as little as 1 year from the harm to file suit to enforce the rules in court.