It has been just over three months since the new Consumer Finance Protection Bureau (CFPB) mortgage servicing standards went into effect and there are already promising signs that these changes will provide measurable benefits for borrowers in a short sale.
Although the full impact of these significant policy changes will develop over time, there is an indication that mortgage servicers are moving quickly to adjust. For example, “the 37-day rule” codified in 12 CFR § 1024.41(c (i.e. If a complete short sale packet more than 37 days is submitted before a foreclosure sale, the servicer has 30 days to evaluate the borrower for the short sale) is now fully integrated into the ever-growing short sale lingo. The 37-day rule is one of the most crucial elements of the CFPB regulations because it finally protects borrowers from unchecked “dual-tracking,” the practice of reviewing a short sale while proceeding through the foreclosure process without delay.
As lenders adapt to the policy changes, borrowers in the short sale process must also have an understanding of the process, or have a trusted professional on their side to represent their best interests.
