Job stress, time constraints, and general instability have all made the housing crisis more severe for members of the U.S. military, the Consumer Financial Protection Bureau (CFPB) reports. More than a third of the bureau's consumer complaints from the military are mortgage-related. In response, the CFPB wrote new mortgage protections for consumers, with particular attention to military members.
The CFPB conducted listening sessions across the United States and heard stories from military families about poor mortgage servicing practices, inconsistent foreclosure practices, and sloppy recordkeeping. The rules provide specific changes, such as a more streamlined process and restrictions on dual tracking. “Obviously, servicemembers aren’t the only homeowners who have run into trouble with mortgage servicers or faced financial hurdles,” concedes Holly Petraeus, head of the CFPB’s military office. “But the demands of military service sometimes increase the severity of the problems or limit the solutions available to address them.”
Under the new rules, a servicer must now evaluate a borrower for all available options as soon as it receives a request for mortgage aid. Servicers also must establish policies that ensure consistent and constant contact with borrowers. Dual tracking, in which a struggling homeowner might have been working on a potential loan modification while the servicer was simultaneously moving to foreclose on the home, is now restricted. The CFPB also cracks down on the misplacement of documents and other factors that make it more difficult for borrowers to get consistent answers about their mortgage. Mortgage servicer employees must now be trained to better answer questions for troubled borrowers.