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The Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA) announced a new joint initiative—the Borrower Protection Program.
The Program enables the CFPB and FHFA to share servicing information to protect borrowers during COVID-19.
Under the guidelines of the program, the CFPB will make complaint information and analytics tools available to FHFA through a secured interface. The FHFA will make information regarding forbearances, modifications, and loss mitigation initiatives by Fannie Mae and Freddie Mac available to the CFPB.
“Help for consumers is always here at the CFPB through our complaints process. In addition to working with your lender to get an answer for you, we analyze the information to better educate consumers, provide clear rules for financial institutions, and hold companies accountable,” said CFPB Director Kathleen L. Kraninger in a release.
Dr. Mark A. Calabria said protecting homeowners during the COVID-19 emergency is “my top priority.”
“No one should be worried about losing their home,” Calabria said. “Borrowers are entitled to accurate information about their forbearance options. This partnership with CFPB ensures FHFA can address misconceptions stemming from consumer complaints by working with Fannie and Freddie servicers.”
The GSEs and the Federal Home Loan Banks—the FHFA’s regulated entities—provide more than $6.3 trillion in funding for the U.S. mortgage market.
In recent weeks there have been numerous agencies allowing homeowners to either defer or pay a reduced mortgage payment in forbearance programs.
Mark Zandi, the Chief Economist at Moody's Analytics estimated that as many as 30% of Americans with home loans—nearly 15 million households—could stop paying their loans if the economy is closed through the summer.
“This is an unprecedented event,” said Susan Wachter, professor of real estate and finance at the Wharton School of the University of Pennsylvania, in an article by the Los Angeles Times. “The great financial crisis happened over a number of years. This is happening in a matter of months—a matter of weeks.”
