Removing Barriers Blog

CFPB and State Regulators Issue CARES Guidance
Posted June 04, 2020 by Chandler Schuette

The CFPB and the Conference of State Bank Supervisors (CSBS) issued joint guidance to mortgage servicers to assist in complying with the forbearance provisions of the CARES Act.

The CARES Act requires servicers of federally-backed mortgages must grant forbearance to borrowers with pandemic-related hardships that may last as long as two consecutive 180-day periods. Furthermore, additional interest, fees, or penalties beyond the amounts scheduled or calculated should be waived with no negative impact to the borrower’s mortgage contract during the forbearance.

According to the joint guidance, mortgage servicers could be in violation of the CARES Act or other applicable laws if they require documentation from borrowers to prove financial hardship, if they did not grant the forbearance once properly requested, or if they steered borrowers away from forbearance or misled them.