Mortgage companies could face fines if they do not take action to prevent foreclosures from flooding, which threatens to hit the housing market later this year, the US regulator said on Thursday.
The Bureau of Consumer Financial Protection (CFPB) has issued a warning about tolerance, which has allowed millions of borrowers to defer their mortgage payments due to the epidemic. To avoid what the bureau called “avoidable foreclosures” when aid is discontinued, mortgage lenders should now turn to affected homeowners for advice on how to change their loans.
“There is a tidal wave of nasty hosts who will need help,” said CFPB Acting Director Dave Vejio. “Those who fight for struggling families in the first place have nothing to fear from our control, but we will hold accountable those who harm their landlords and families.”
In a statement issued Thursday, the CFPB said that companies “unable to properly manage harm mitigation can expect the bureau to take enforcement or control action.”
As of January, more than 2 million borrowers had either deferred their payments or failed to make them for at least three months, according to the bureau. When government-sponsored tolerance plans begin in September, hundreds of thousands of people may need support to recover.