New Rules Aim to Protect Widowed Homeowners from Foreclosure

Los Angeles Times |  August 5, 2016    The Consumer Financial Protection Bureau has issued new rules aimed at protecting widowed homeowners from a red-tape nightmare that has caused them to lose their homes to foreclosure.

The regulations, announced Thursday, generally give surviving spouses who are not on a mortgage note the same protections borrowers have. Those include a ban on so-called dual tracking in which mortgage servicers negotiate with clients to modify a mortgage while simultaneously pursuing foreclosure.

The rules, which expand and clarify existing guidance from the agency, were long awaited by consumer groups that are pushing similar regulations in a pending California Senate bill.

Those advocates say survivors — who already owned their homes or inherit them after a death — face considerable resistance from servicers when they seek loan modifications after losing their spouse’s income.  Read more here.