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New Federal Rules on Foreclosure

Posted in Foreclosure

New Federal Rules on Foreclosure —By Erika Eichelberger – Thanks to Mother Jones On Thursday, the Consumer Financial Protection Bureau, the federal consumer watchdog set up by the Dodd-Frank financial reform bill, announced a new set of foreclosure-prevention rules focused on keeping loan servicers honest. Servicers, which collect mortgage payments from borrowers and work out terms of a loan, are supposed to explore all alternatives to foreclosure before reclaiming a home, and to give homeowners a fair and clear evaluation process. But as millions of borrowers fell behind on payments in the wake of the financial meltdown, loan servicers got slammed by tons of added legwork and administration, and many more got perverse incentives to fast-track borrowers into default. Some servicers put on a spectacular show of incompetence and outright fraud, routinely losing paperwork, “robo-signing” people into wrongful foreclosures, and locking people out...

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