Trade groups issue extension request for comments on Reg X changes

A coalition of eight trade groups — including the Housing Policy Council (HPC), the Mortgage Bankers Association (MBA) and the Community Home Lenders of America (CHLA) — have requested additional time from the Consumer Financial Protection Bureau (CFPB) to comment on proposed changes to Regulation X, which implements the Real Estate Settlement and Procedures Act (RESPA).

Last week, the CFPB unveiled a series of proposed changes to Regulation X that would require mortgage servicers to emphasize borrower assistance and loss-mitigation options over foreclosure when a borrower struggles to make their required mortgage payments.

The current due date for comments on the proposal is Sept. 9. While the co-signers agree that additional rulemaking around Regulation X is needed, the complexity of the new proposal is high enough that the groups require additional time to submit their contributions, according to a letter sent to CFPB Director Rohit Chopra and reviewed by HousingWire.

“[A] 60-day comment period does not provide sufficient time to meaningfully address the significant and potentially complex issues, like the new procedural review period, that are covered by the rulemaking,” the letter explained. “In addition, the servicing industry is still in the process of undergoing massive program transformation, as a result of policy changes made over the course of the pandemic.”

Specifically, servicers are “currently working to execute servicing program changes for all four of the Ginnie Mae government programs as well as for Fannie Mae and Freddie Mac,” the letter said.

Some of the more significant challenges currently being worked through include the U.S. Department of Veterans Affairs (VA) servicing purchase (VASP) program, a new payment supplement program from the Federal Housing Administration (FHA) as well as the FHA’s proposed defect taxonomy changes, and proposed changes to Fannie Mae’s and Freddie Mac’s flex modification options.

Each of these proposals have upcoming due dates ranging from Aug. 26, 2024 to Jan. 1, 2025, the groups explained.

“The same group of subject matter experts that need to consider and provide input on your proposal are actively engaged on these other workstreams,” the letter explained.

The groups collectively request “at least” an additional 30 days to submit comments on the Regulation X proposal. As of Thursday afternoon, the deadline has not yet been changed from Sept. 9.