When you applied for your mortgage loan, you may have chosen your lender carefully based on your financial plan and what rates were offered to you. However, a different company may be servicing your loan, and this change may not be entirely welcome, particularly if you have come under hard times and are having difficulty making payments. According to Reuters, the Consumer Financial Protection Bureau recognizes that some mortgage servicers are not treating their customers fairly, and that federal agency is working to correct the injustices.
Under current regulations, if your servicer has already begun the foreclosure process, filing an application for a loss mitigation program does not prevent the foreclosure proceedings from moving forward. Not only that, but the amount of time that the servicer takes to process the application could affect your eligibility for loss mitigation. This is even more likely if the company did not provide you with the proper information for the program until the foreclosure process was underway. The CFPB is addressing these problems with regulations that will require the servicer to provide you with timely information and communication, and to ensure that your application is processed quickly.
People who have already been granted a loan modification and are making their payments on time are not exempt from emergency situations such as job loss or death of an income provider. The CFPB requires servicers to offer you another opportunity to apply for loss mitigation if unforeseen circumstances have set you back again. Other conditions may apply, depending on your unique situation, so this general information should not be interpreted as legal advice.
