Financial agency’s plan to further prevent foreclosures ignores economic realities
Columbus, Ohio, April 7, 2021 / PRNewswire / – Distressed Assets Auctioneer Richard kruse by Gryphon United States said the Consumer Finance Protection Bureau’s plans to delay foreclosures for an additional nine months and create more regulations only increase pressure on consumers and the country’s housing market.
The CFPB this week announced proposed rules to encourage lenders and loan managers to continue working with consumers to avoid foreclosures, pushing potential deposits to January 2022.
“I understand the intention,” Kruse said. “But the CFPB is effectively calling for an immediate and unrealistic overhaul of the lending, investment, service and mortgage insurance sectors, without realizing that the end result will be worse with these rules than allowing the legal system to work.”
Almost 13 months ago, Congress and the Trump administration agreed to a one-year ban on mortgages insured by U.S. agencies with a March 31, 2021 sunset. Some evictions were also postponed as the Coronavirus-19 pandemic spread and millions of Americans lost their jobs. In February, the Biden administration, through various agencies, extended the ban on foreclosure and eviction through June 30th.
The CFPB, in its April 5 press release, warns that the expected surge in borrowers coming out of forbearance in the fall will put mortgage managers to the test. (https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-mortgage-servicing-changes-to-prevent-wave-of-covid-19-foreclosures/)
As the independent commission tries to scare Americans about this wave of potential foreclosures, Kruse said the proposed delay would only allow non-performing mortgages to be further advanced in default, which would have a negative impact. negative impact on the owner once the ban is lifted.
“Consumers have had a year to identify next steps and the administration is now suggesting adding another 6 months to the schedule. What the CFPP doesn’t seem to understand is that their proposal won’t stop foreclosures,” Kruse said. “Call it what you like; throw the can back on the road, stick another finger into the dike, or pile extra pressure behind a clog that should eventually burst.”
Kruse added: “The point is that throwing these new rules on the problem will not solve the financial distress of the owners; it will only delay it. The proposed changes are unrealistic to implement and will ultimately fail, but the administration gets its hollow victory from being able to say “well, we’ve tried” while troubled borrowers can say “thank you very much for that”. ”
SOURCE Griffon United States