The U.S. Department of Housing and Urban Development (HUD) and the
Consumer Financial Protection Bureau (CFPB) issued separate updates on
Monday aimed at clarifying or issuing guidance to their specific sectors
in the wake of increasing concern related to the outbreak of the
HUD issued a new informational notice aimed to remind mortgagees of
the various loss mitigation program options available to them from the
Federal Housing Administration (FHA), in light of concerns related to
the spread of the virus.
“As with any other event that negatively impacts a borrower’s ability to pay their monthly mortgage payment, FHA’s suite of loss mitigation options provides solutions that mortgagees should offer to distressed borrowers – including those that could be impacted by the coronavirus – to help prevent them from going into foreclosure,” the notice reads in part.
The relevant home retention options are located in the FHA Single Family Housing Policy Handbook 4000.1, in section III.A.2.
The CFPB, meanwhile, released a statement aimed at encouraging
American financial institutions to meet any needs of consumers that
arise as a result of the outbreak.
“The agencies recognize the potential impact of the coronavirus on
the customers, members, and operations of many financial institutions
and will provide appropriate regulatory assistance to affected
institutions subject to their supervision,” the CFPB statement reads.
“Regulators note that financial institutions should work constructively
with borrowers and other customers in affected communities. Prudent
efforts that are consistent with safe and sound lending practices should
not be subject to examiner criticism.”
The statement goes on to say that financial regulators understand
that institutions may be faced with unique challenges as a result of the
virus, including staff shortages for those whose employees elect to
either remain at, or work from home.
“In cases in which operational challenges persist, regulators will expedite, as appropriate, any request to provide more convenient availability of services in affected communities,” the CFPB said. “The regulators also will work with affected financial institutions in scheduling examinations or inspections to minimize disruption and burden.”