Pennsylvania recently published amendments to its mortgage servicing regulations to reflect and incorporate changes to the CFPB’s regulations related to the COVID-19 pandemic. These changes, which affect definitions, early intervention requirements for certain borrowers, and loss mitigation procedures, are effective immediately.
More specifically, the regulations require a servicer to take COVID-19-specific actions when establishing live contact with delinquent borrowers. Depending on whether the borrower is in a forbearance program, such actions include informing the borrower of forbearance programs and describing programs or informing the borrower of extension and repayment options. Under certain circumstances, servicers may also offer borrowers loss mitigation options and loan modifications based upon incomplete applications. Moreover, the regulations provide for procedural safeguards to provide borrowers with a meaningful opportunity to pursue loss mitigation options before a servicer may make the first notice or filing for any foreclosure process because of a loan mortgage obligation being more than 120 days delinquent.