Fannie Mae and Freddie Mac announced earlier this week updates to their policies to address possible interest rate increases on previously modified loans, hoping to prevent distressed borrowers from re-defaulting. Servicers are now required to evaluate mortgage loans backed by the two GSEs and actively reach out to borrowers to offer a streamlined loan modification if the mortgage loan was previously modified to include a step-rate feature, which allows for a gradual rate increase in the first few years, and if the mortgage rate becomes 60 days delinquent in the first 12 months following a rate increase.
Servicers are required to comply with the updates for loans evaluated on or after July 1, 2015, though they are encouraged to begin complying as soon as possible. The GSEs are offering streamlined modifications as a way for borrowers who previously modified their mortgage loans through Treasury's Home Affordable Modification Program who are not prepared to handle interest rate increases that go into effect when their five-year loan modifications reset.
The Consumer Financial Protection Bureau finalized a policy on Thursday that will allow consumers to share their complaints publicly about financial institutions, according to an announcement from the CFPB. Under the new policy, consumers have the option to share their complaint narratives in the CFPB's public-facing Consumer Complaint Database when they submit a complaint to the Bureau. Companies will have the opportunity to publicly respond to the complaints against them by choosing from a list of structured response options.