A 40-YEAR MORTGAGE?!



CFPB foreclosure prevention rule would allow 40-year mortgage terms!

Last week the Consumer Financial Protection Bureau proposed a new rule for homeowners who are delinquent on their mortgages. It would create a ‘temporary Covid-19 emergency pre-foreclosure review period”. The word temporary has been stretched as forbearance and foreclosure deadlines have been repeatedly extended. And that’s not necessarily a bad thing but we should ask what are the possible unintended consequences?

One consequence could be what is in effect the indentured servitude of millions of mortgage holders. Case and point, the CFPB’s proposed streamlined process of loan modifications could allow a mortgage term as long as 40 years. The question is are millions who refinance into a 40-year loan or extending their mortgage term entering into a modern form of indentured servitude?

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1 comment

David Garrison April 12, 2021 at 6:10 am

Great idea Shannon; now if we could just find the right point person at CFPB or HUD to champion this idea

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