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CFPB Help available for soldiers facing foreclosure
WASHINGTON (10/3/11)--The Consumer Financial Protection Bureau's (CFPB) Office of Servicemember Affairs leader Holly Petraeus last week praised the U.S. Treasury for extending the terms of its Home Affordable Foreclosure Alternatives (HAFA) Program to aid military families that are facing mortgage difficulties due to relocation. Petraeus noted that relocation orders that are given to families that owe more than their home is worth have forced some military families into foreclosure or “into the costly and stressful situation of maintaining two households, with the family remaining behind while the servicemember moves alone.” She added that many servicemembers that have asked their lenders to help with a loan modification or a short sale have been told that they must be delinquent “in order to be considered as having a qualifying financial hardship.” Under new guidance, “servicemembers who cite a [permanent change of station (PCS)] order as the basis for their financial hardship when asking for help under HAFA will now be eligible even if their income has not decreased,” Petraeus said in a blog post. HAFA, according to Fannie Mae, provides financial incentives to servicers and borrowers who utilize a short sale or a deed-in-lieu of foreclosure to avoid a foreclosure on eligible loans. This helps preserve the condition and value of the property by minimizing the time a property is vacant and subject to vandalism and deterioration, Fannie Mae added. Petraeus in her blog post encouraged legislators, regulators and financial institutions to do more to help military families. The Credit Union National Association (CUNA) recently called on the CFPB to "minimize compliance burdens on credit unions that provide important and reasonably priced products and services" to servicemembers and their families. CUNA plans to work with the CFPB on its servicemember protection endeavors, and has encouraged the CFPB to work with credit union leagues, the Defense Credit Union Council, and individual credit unions to further support the CFPB’s pro-servicemember efforts.
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