On April 15, the Consumer Financial Protection Bureau and the Federal Housing Finance Agency (“FHFA”) announced a joint initiative known as the Borrower Protection Program (“Program”), through which the CFPB and FHFA will share servicing information during the coronavirus (“COVID-19”) national emergency.
The CFPB currently processes consumer complaints and receives responses from companies through its consumer complaint system. The CFPB takes the information gathered through this system into account in supervisory and enforcement work. As part of the new Program, the CFPB is making borrower complaint information and analytical tools available to the FHFA.
The FHFA regulates Fannie Mae, Freddie Mac, and the Federal Home Loan Banks system, which collectively provide more than $6.3 trillion in funding for the United States mortgage market. In response to the COVID-19 national emergency, Fannie Mae and Freddie Mac are permitting borrowers with a financial hardship due to the pandemic to enter into a forbearance, pause, or reduction of their monthly mortgage. The missed payments can be added to the normal monthly payments, paid back all at once, tacked on to the end of the loan, or the borrower can have the term of the loan extended. Mortgage servicers are responsible for working with borrowers to set up repayment plans that work for both parties. Under the new Program, the FHFA is making available to the CFPB information about forbearances, modifications, and other loss mitigation initiatives undertaken by Fannie Mae and Freddie Mac in response to the pandemic.
According to CFPB Director Kathleen Kraninger, “[t]hrough the partnership being announced today, the Bureau will share our insights with FHFA and ensure we get their data on how mortgage servicers are working with their customers during this critical time and going forward.” According to FHFA Director Mark Calabria, “[t]his partnership with CFPB ensures FHFA can address misconceptions stemming from consumer complaints by working with Fannie and Freddie servicers.”
In addition to navigating the challenges of implementing COVID-19-inspired legislation in the face of unprecedented borrower demand for relief, servicers should be mindful of this new coordinated monitoring effort by two key federal regulators.