Foreclosure Rule Changes- What This Means for Homeowners in San Antonio

What the New CFPB Foreclosure Rule Means for Homeowners Facing Foreclosure in San Antonio

If you’re a homeowner in San Antonio and worried about foreclosure, you’re not alone. Many families face the same concerns. Fortunately, the Consumer Financial Protection Bureau (CFPB) recently announced a proposed rule that could make the foreclosure process more manageable for homeowners. This blog will help explain what these changes mean and how they may help you avoid losing your home. And remember, if you're facing foreclosure in San Antonio, I offer free assistance to help you navigate this challenging time.

What is the CFPB’s Proposed Rule?

On July 10, 2024, the CFPB introduced a proposed rule that aims to give borrowers like you more time, protection, and options when struggling to make mortgage payments. If approved, this rule would require mortgage servicers to do everything possible to help you avoid foreclosure before they can start the foreclosure process. This includes offering every available loss mitigation option—which can be anything from a loan modification to forbearance or a repayment plan.

The goal is to make sure you have every opportunity to work out a solution before foreclosure is even considered. This is important because foreclosure can have long-lasting consequences on your credit and financial stability.

Key Changes for Homeowners

Here’s a breakdown of what the proposed rule means for you as a homeowner in San Antonio:

1. More Time and Protection Before Foreclosure

Under the new rule, as soon as you request assistance (whether it’s verbally or in writing), the foreclosure process would be paused. This means no foreclosure can proceed until the mortgage servicer has explored every possible way to help you avoid it. No more dual tracking, where a lender can continue to move forward with a foreclosure even while you're trying to find a solution.

For example, if you're struggling to keep up with payments, simply calling your mortgage servicer and asking for help would immediately trigger these protections. The servicer must then review your situation and try to find a solution—whether that’s a loan modification, repayment plan, or another form of assistance. 

2. Servicers Must Exhaust All Loss Mitigation Options 

Before a servicer can even consider foreclosure, they must ensure they’ve exhausted every loss mitigation option available. This includes offering you:

- Loan modifications (changing the terms of your loan to make payments more affordable)

- Forbearance plans (temporarily pausing or reducing your mortgage payments)

- Repayment plans (spreading out missed payments over a period of time)

- Other foreclosure alternatives, such as a short sale or deed-in-lieu of foreclosure

These options could make a huge difference in whether or not you’re able to stay in your home. And the best part is that servicers are required to review each option one by one, ensuring nothing is missed.

What is Loss Mitigation?

Loss mitigation refers to the process where lenders work with borrowers to avoid foreclosure. This process can involve changing the terms of your mortgage, reducing monthly payments, or even pausing them temporarily to help you catch up. The new rule aims to make sure **this process is streamlined** and protects homeowners from foreclosure while they’re working through their options.

What If I Don’t Respond to My Mortgage Servicer?

Under this proposed rule, your servicer must make regular efforts to communicate with you about loss mitigation options for at least 90 days before moving forward with foreclosure. So, even if you’re behind on payments, you have some breathing room to explore your options without the immediate fear of foreclosure.

What Happens During the Loss Mitigation Review Cycle?

The CFPB’s proposed rule introduces a new term, the “loss mitigation review cycle.” This is the period during which the servicer is required to explore all possible foreclosure alternatives for you. Here’s how it works:

- It starts as soon as you ask for help: Whether you write, call, or even mention that you're struggling to pay your mortgage, the loss mitigation review cycle begins. This triggers the protections that prevent foreclosure from advancing.

- It continues until a solution is found: The cycle only ends once the servicer finds a loss mitigation solution (like a loan modification or forbearance plan) that either brings your mortgage current or resolves the issue.

- It lasts through forbearance or a trial plan: If you’re in a temporary forbearance period or trial repayment plan, the protections remain in place until you successfully catch up on payments.

Prohibition of Dual Tracking and Fees

Dual tracking is when a lender can move forward with a foreclosure process while you’re trying to work things out. The proposed rule would end this practice. Now, once you ask for help, the foreclosure process can’t start unless the servicer has tried every possible solution, or unless you’ve gone 90 days without responding.

Additionally, the rule limits the fees that servicers can charge while you're in the loss mitigation process. This means no surprise penalties while you're already struggling to make payments. The only exception would be late fees that are part of your original loan agreement.

New Communication Standards for Servicers

The rule would also require mortgage servicers to provide clear, personalized notices to help you understand your options to avoid foreclosure. These notices will lay out what steps you can take and what assistance is available.

And if you’re more comfortable communicating in a language other than English, this proposed rule would require servicers to offer you that option. For example, if your loan was marketed to you in Spanish, then the servicer must provide important communications and loss mitigation notices in Spanish as well.

How Does This Affect Homeowners in San Antonio?

In San Antonio, where many families are facing financial strain, this proposed rule could make all the difference in staying in your home. If you’re at risk of foreclosure, this new rule, if enacted, will give you more time and more options to avoid it. You’ll have protection from foreclosure until every possible solution is explored, which means more time to get back on track.

With the real estate market in San Antonio being highly competitive, these protections could provide much-needed relief and prevent homes from going to foreclosure unnecessarily.

What Should You Do If You’re Facing Foreclosure?

If you're in San Antonio and struggling to make mortgage payments, it’s essential to take action before it’s too late. Here’s what you can do:

1. Contact your servicer immediately: Let them know you need help and ask about your loss mitigation options.

2. Stay in communication: Ignoring calls or notices from your lender can hurt your chances of finding a solution.

3. Ask for help: If you're unsure what steps to take, I offer free assistance to homeowners in San Antonio facing foreclosure. I can guide you through the process, explain your options, and help you avoid losing your home.

4. Understand your rights: If this proposed rule passes, you’ll have more protections than ever before. Familiarize yourself with what’s available to you and don’t hesitate to ask for help when you need it.

Why This Rule Matters for San Antonio Homeowners

This proposed rule by the CFPB could be a game-changer for homeowners who are struggling to keep their homes. For San Antonio homeowners in particular, it means:

- More time to explore options before foreclosure: Your mortgage servicer must give you the time to find a solution without rushing into foreclosure.

- No more foreclosure while trying to work things out: Dual tracking will no longer be an issue.

- Clearer communication and transparency: Servicers will be required to explain all your options and offer assistance in multiple languages if needed.

Need Help? I Offer Free Foreclosure Assistance in San Antonio

Facing foreclosure can feel overwhelming, but you don’t have to go through it alone. I’m here to help. As a real estate professional specializing in foreclosure assistance in San Antonio, I offer completely free help to homeowners like you. Whether you need guidance on loss mitigation options, or just want to understand your rights, I’m available to help you navigate this difficult time.

Final Thoughts

The proposed CFPB rule, if passed, could provide vital protections for homeowners in San Antonio and across the country. It ensures that your mortgage servicer will do everything possible to help you avoid foreclosure before taking any drastic steps. If you’re facing financial difficulties and worried about losing your home, don’t wait—reach out for help today. 

Whether you need information, assistance with your lender, or just someone to guide you through the process, I’m here to help you—for free. Together, we can find a way to protect your home and your future.

Contact Information:

Ashley, San Antonio Foreclosure Specialist
Email: AshleyBrockmanRealtor@gmail.com
YouTube: @AshleySellsSanAntonio