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Pennsylvania adopts mortgage servicing regulations

State Issues Pennsylvania Mortgages Covid-19 Loss Mitigation Mortgage Servicing Forbearance

State Issues

On September 25, the Pennsylvania Department of Banking and Securities adopted provisions regarding mortgage servicing regulations. Among other things, the regulations clarify the definition of a “COVID-19 related hardship,” establish general disclosure requirements, and provide early intervention and loss mitigation procedures and options. Specifically, the regulations establish that until October 22, 2022, a servicer must, after establishing live contact for borrowers not in forbearance programs, inform them that forbearance programs are available for those experiencing a “COVID-19-related hardship” and must list and describe these forbearance programs and the actions the borrower must take to be evaluated for the programs, among other things. Additionally, for borrowers in forbearance programs at the time of live contact, servicers, until October 22, 2022, must provide the end date of the borrower’s current forbearance program, a list and description of the types of forbearance extensions, and a way that the borrower can find contact information for homeownership counseling services, among other things. The regulations also establish loss mitigation procedures in that a servicer may offer a borrower a loss mitigation option based upon evaluation of an incomplete application, provided that certain criteria are met. In addition, the regulations create certain Covid-19-related loan modification options, such as a loan modification can be made available to borrowers experiencing a Covid-19-related hardship. The regulations are effective immediately.

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