WASHINGTON, D.C. – U.S. Sen. Sherrod Brown of Ohio is criticizing the Consumer Financial Protection Bureau (CFPB) for failing to ensure that borrowers know that they’re legally entitled to temporary relief from mortgage payments during the coronavirus pandemic.
In his capacity as top Democrat on the Senate Committee on Banking, Housing and Urban Affairs, Brown and several other committee members sent a letter Wednesday that chided Consumer Financial Protection Bureau Director Kathleen Kraninger for its “failure to ensure that borrowers are receiving timely and accurate information regarding their options to access mortgage relief and avoid foreclosures during the novel coronavirus 2019 (COVID-19) pandemic.”
Brown and his colleagues note that The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides borrowers with federally backed mortgages the right to request a forbearance for up to one year by submitting a request to their mortgage servicer and affirming that they were experiencing “financial hardship during the COVID-19 emergency.”
They say that surveys by outside entities as well as inquiries Democrats sent to 11 major mortgage services showed that materials sent to eligible borrowers often don’t provide them with their “specific legal rights and present a menu of post-forbearance options.”
Fannie Mae’s National Housing Survey, released last month, found that 56 percent of borrowers surveyed who made less than $50,000 were not familiar with the mortgage relief options, and more Black and Hispanic borrowers than whites were unaware of their options, the letter said. They also cited an Urban Institute analysis that said “530,000 homeowners who became delinquent after the pandemic began did not take advantage of forbearance, despite being eligible to ask for the plan.”
“Instead of taking proactive steps to make sure that borrowers are aware of their options for mortgage assistance when they need it, the Bureau has been coddling the largest banks and mortgage servicers while doing virtually nothing to help borrowers,” said Brown’s letter, which urged the CFPB to use its resources to mount a strong public awareness campaign to ensure that borrowers know about available forbearance relief. “It is essential that the Bureau use every single tool at its disposal to ensure these individuals are aware of and understand their options to keep their homes during this unprecedented global pandemic.”
The CFPB’s press office did not respond to an emailed request for comment on Brown’s letter. The agency has put together web pages and videos to let homeowners know their rights during the pandemic.
In July testimony before Brown’s committee, Kraninger said that since the first days of the pandemic, her bureau “has taken swift action to protect consumers and ensure financial institutions have the direction and flexibility to work with their customers in need.
“Those actions range from efforts to empower older Americans, to guidance offered about how to avoid potential scams related to the virus, to roadmaps of what relief is available to renters and mortgage holders under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) legislation,” said Kraninger. “In April, the Bureau worked with Federal partners to launch a new mortgage and housing assistance website.”
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