CFPB Issues Ruling to keep Heirs from Falling into Foreclosure

house-keyThis only seems fair. It also means that the lender will not be forced to add anyone to the mortgage it just means that the lender will be encouraged to. For a more detailed look at this subject – please read the article below.

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When a borrower dies, the passing of property to the remaining family members can be a complicated process. Even if there are no issue with the borrower’s estate there can be issues transferring the mortgage to a party that had no previous relationship with the servicer.

The Consumer Financial Protection Bureau (CFPB) issued guidance Tuesday aimed at making it easier for surviving family members who have inherited a property due the death of a loved one to be added to the mortgage, allowing them to seek modification or refinance and avoid foreclosure.

Specifically, the Bureau ruled that the heir may be added to the mortgage without triggering the CFPB’s Ability to Pay Rule.

“Losing a loved one should not mean also losing your home. Today’s interpretive rule makes it clear that when family members inherit property, they can take over the mortgage without jumping through unnecessary hoops,” said CFPB Director Richard Cordray. “This gives heirs an opportunity to work with the lender to pay off the loan or seek a loan modification.”

The Ability to Pay Rule took effect in January of 2014 and requires lenders to make a good faith effort to ensure that the borrower is actually has the ability to make payments on the loan that they are applying for. The rule purports to ward off predatory lending practices.

To read the complete article please use the link below.

Ruling to keep Heirs from Falling into Foreclosure

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