Source: https://www.tampabankruptcylawyerblog.com/loss-mitigation-and-pending-lo/
Timestamp: 2019-04-21 21:08:49+00:00

Document:
On January 10, 2014, new RESPA rules went into effect concerning loss mitigation procedures. The new rules specify procedures a servicer must follow if a mortgage loan borrower requests loss mitigation assistance, such as a loan modification. The rules were drafted by the Consumer Financial Protection Bureau (“CFPB”). In drafting the loss mitigation requirements in Regulation X § 1024.41, the CFPB drew a distinction between “substantive” and “procedural” regulation of servicers’ loss mitigation activities. (See Section-by-Section Analysis, § 1024.41, 78 Fed. Reg. 10,816/-/18 (Feb. 14, 2013)). The regulation expressly states that nothing in § 1024.41 imposes a duty on a servicer to provide any borrower with a specific loss mitigation option. (Reg. X, 12 C.F.R. § 1024.41(a) (effective Jan. 10, 2014)). Instead, the CFPB has mandated a procedural framework within which the evaluation of loss mitigation options must take place. (12 C.F.R. § 1024.41(a). See Section-by-Section Analysis, § 1024.41, 78 Fed. Reg. 10,818 (Feb. 14, 2013)).
A servicer has a duty to respond to an application whether or not it is complete. (Reg. X, 12 C.F.R. § 1024.41(b)(2) (effective Jan. 10, 2014)). When initially made aware of a communication that can reasonably be deemed to be an application for loss mitigation, the servicer must promptly conduct a review to determine whether the communication represents a complete or an incomplete application. (Reg. X, 12 C.F.R. § 1024.41(b)(2)(i)(A)(effective Jan. 10, 2014)). If the servicer determines that the application is complete, it must send the borrower a notice acknowledging that the application is complete within five business days of receipt of the application. (Reg. X, 12 C.F.R. § 1024.41(b)(2)(i)(B) (effective Jan. 10, 2014)).
For more information or advise regarding available options, please contact Christie D. Arkovich, P.A.

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