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CFPB Updates Consumers on Forbearance Options

The Consumer Financial Protection Bureau (Bureau) has recently released several resources to help consumers take steps to protect their finances during the COVID-19 pandemic, including how to avoid financial scams and submit complaints to the Bureau.

“During this difficult time, the Bureau is doing everything it can to facilitate the work of responsible financial companies supporting their customers and borrowers,” said Director Kathleen L. Kraninger. “We want consumers facing hardships to be are aware of this posture and encourage them to discuss their specific circumstances with their lenders.  As a backstop, the CFPB stands ready to help consumers resolve issues with their financial services providers through our consumer complaint system.”

The CFPB’s information includes a reminder to consumers to contact their lenders if they cannot make their payments. Many lenders are now providing forbearance loan extensions, a reduction in interest rates, and/or other flexibilities for repayment. The Federal Housing Finance Agency (FHFA) has authorized Fannie Mae and Freddie Mac to enter into additional dollar-roll transactions—provide mortgage-back securities investors with short-term financing.

This is just the latest action by the FHFA during the outbreak of COVID-19, as it recently announced the suspension of foreclosures and evictions for at least 60 days and offering forbearance to borrowers impacted by the virus.

lenders are also saying they will not report late payments to credit reporting agencies or waiving late fees for borrowers in forbearance due to this pandemic.  FHFA Director Mark Calabria discussed with CNBC how forbearance will impact the credit scores of borrowers.

“If you’re in a forbearance plan and you’re meeting the terms of that plan, it will not be reported to your credit bureau, there will not be a ding on your credit,” Calabria said. “If you don't reach out to your lender and get a plan and don’t pay, you will get hit.”

“We also want consumers to know the various steps they can take to help themselves or a loved one, both in the short and long term,” she adds. “Our resources address situations ranging from consumers having difficulty paying their bills or meeting other financial obligations to consumers experiencing a loss of income to avoiding scams.”

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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