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NAFCU Senior Regulatory Counsel Elizabeth LaBerge Friday discussed with the CFPB its interim final rule (IFR) related to Regulation X, which clarified mortgage servicers do not violate the regulation's provisions by offering certain coronavirus-related payment deferral options, and how the bureau can provide more relief to credit unions amid the coronavirus pandemic.

The rule took effect July 1.

During Friday's meeting, LaBerge asked the bureau to address other post-forbearance options, like disaster loan modifications, in a similar way so credit unions are not burdened trying to compile full loss mitigation applications when they are not required by investors for review.

The Regulation X issue arose following the Federal Housing Finance Agency's announcement that the government-sponsored enterprises (GSEs) would begin offering a new payment deferral option for loans in forbearance. The payment deferral option allows borrowers, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity.

The bureau explained that Regulation X would normally require servicers to collect a complete loss mitigation application before making an offer, with some exceptions. The IFR detailed certain criteria loss mitigation options must meet to qualify for the coronavirus-related exception, and noted that the exception is not limited to payments forborne under the CARES Act.

For servicers, the IFR provided some relief as it does not require servicers to exercise reasonable diligence to obtain a complete application nor provide the acknowledgement notice once the borrower accepts an offer for an eligible program.

NAFCU has continued to share concerns about the impacts of sections of the CARES Act that provide borrowers with forbearance options for single-family and multifamily loans sold to the GSEs. Since the CARES Act was enacted at the end of March, NAFCU has worked with Congress, the FHFA, NCUA, and Treasury Department to address concerns about the health of mortgage markets and provide credit unions with additional relief.