Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. The CFPB supervises banks, credit unions, and other financial companies, and enforces federal consumer financial laws.

Borrowers may apply again for under the new rules Even if they applied for and were rejected for loss mitigation before the new rules took effect Provided they file their complete applications more than 37 days before a scheduled foreclosure sale.

Changes to the Foreclosure Process New Federal Protections to insure availability of all Foreclosure Avoidance Options Ending worst runarounds and worst surprises

90 days+ servicer must give the borrower at least 14 days to accept or reject an offer of a loss mitigation borrower may appeal the denial borrower has 14 days to file an appeal 45 days+ Must acknowledge receipt of the application in writing Determine if the application is complete Less than 45 days before a foreclosure sale No written notice that their application has been received is required. CFPB Timelines for Foreclosure

Explain Decisions to Borrowers Evaluate borrower for all foreclosure avoidance options completed application 37 days or more before sale date Not required to offer any specific loss mitigation options. Must give specific reasons for the denial

Foreclosure Law Conflicts When both State and Federal laws apply Highest protective value statute applies. Example: 37 Day rule for Application for Mortgage Assistance – Does not apply in WA, Superseded by the WA Foreclosure Fairness Act.

CFPB Rules: A complete application received by a servicer 37 days or more before a scheduled foreclosure sale must be evaluated for loss mitigation options available to the borrower. Foreclosure Law Conflicts FFA Rules: Beneficiaries must review a borrower in mediation for all loss mitigation options

CFPB Continued: When received within 45 days of a sale Servicer must acknowledge receipt of the application in writing Determine if the application is complete FFA Continued: Parties are required to exchange documents within a certain timeframe Beneficiaries should notify the Borrower if any additional documentation is required to complete a thorough review. Foreclosure Law Conflicts

CFPB Rules: The servicer must give the borrower written notice of its decision for any loss mitigation review. Foreclosure Law Conflicts FFA Rules: The Beneficiary must provide the borrower with an explanation regarding any denial for a loan modification, forbearance, or other alternative to foreclosure in sufficient detail for a reasonable person to understand why the decision was made

Foreclosure Law Conflicts CFPB Continued: Provided that the application is submitted 90 days prior to a sale Servicer must give the borrower at least 14 days to accept or reject an offer of a loss mitigation Borrower may appeal the denial Borrower has 14 days to file an appeal FFA Rules: Mediators may require a second session to allow parties to fully explore all options available to them, including appeals and/or additional submissions

CFPB Rules: A servicer cannot sell the home while review of a loss mitigation application is underway A servicer cannot sell the home while an appeal is pending or during an open appeal period Foreclosure Law Conflicts FFA Rules: If mediation referral is made prior to a notice of sale being issued, a notice of sale may not be issued until the mediation is complete and the mediator certification has been filed. If a notice of sale was issued prior to the mediation referral, the house may not be sold until the trustee has received the mediator's certification that mediation has concluded.

Foreclosure Law Conflicts CFPB: Borrowers may reapply under new rules Even if they applied for and were rejected for loss mitigation before the new rules took effect Provided they file their complete applications more than 37 days before a scheduled foreclosure sale. FFA: Even if previously reviewed and denied a borrower must be evaluated for all available loss mitigation options again in mediation. This evaluation must occur in mediation regardless of when a foreclosure sale is scheduled. The CFPB 37 day rule will not apply in mediation to allow a beneficiary to refuse a review for loss mitigation options.