Politics & MoneyMortgage

6 ways to save the family home after a death or divorce

The CFPB needs to implement changes

The National Consumer Law Center released a new report detailing the troubles people face after a transfer of homeownership as a result of a death or family breakup in order to help push the Consumer Financial Protection Bureau into action, an article in the Detroit Free Press by columnist Susan Tompor said.

The NCLC explained that these homeowners are called “successors in interest” or “successors” because they succeed to ownership of the home after a death or family breakup.

From the article:

"Often the successor needs a loan modification to bring the loan current and adjust the payment to an affordable level," the National Consumer Law Center stated.

But too often, mortgage loan servicers have made the process cumbersome or impossible for homeowners to handle on their own, advocates say.

As a result, the article explained that the National Consumer Law Center has called for regulatory protections to prevent unnecessary foreclosures and help vulnerable families stay in their homes. While the Consumer Financial Protection Bureau currently has proposed rule changes that incorporate policies that would help successors avoid foreclosures, it still needs to finalize and implement the changes.

The report from the NCLC includes six key recommendations for successors to protect their interests and reduce unnecessary foreclosures. Here's a preview of two rules listed:

1. Communication

Successors need to be able to access information about the mortgage secured by their home, including monthly payment amounts, outstanding principal balances, insurance information, and payment histories. Successors should have a clear path to confirming their status and receiving loan information without having to provide documents that do not exist or cannot be produced. 

2.Reasonable Document Requirements

Successors need a clear path to confirming their status while servicers need to be able to rely on documented proof of a successor’s position. Clear, reasonable requirements can protect both parties while preventing the never-ending loop of document submissions. Successors only should be required to document their status as needed under state law and should not be required to face additional legal hurdles, such as opening a probate case where none is needed.

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