Mortgage rules adopted in March to reduce foreclosures have been approved by North Carolina's Rules Review Commission and will take effect for licensed mortgage servicers on June 1, according to the North Carolina Office of the Commissioner of Banks (NCCOB). The final rules apply to non-bank mortgage servicers regulated by NCCOB under the North Carolina SAFE Mortgage Licensing Act and do not apply to bank servicers.
New Rule 703 will require servicers to stop foreclosure efforts pending the consideration of a homeowner's request for assistance. Currently, most servicers continue to advance foreclosure proceedings while they are in the process of modifying the delinquent loan, which NCCOB says adds significant costs and confusion for homeowners. Given the unprecedented number of homeowners requesting assistance, some servicers have struggled to qualify borrowers for assistance in a timely fashion, which has led to some losing their home when they would have been eligible for existing foreclosure-prevention programs, NCCOB says.
Servicers also will be required to respond promptly to homeowner requests for assistance. New Rule 702Â provides a timeline for communications to homeowners and specifies the required content of communications to increase the reliability, transparency, and efficiency of the foreclosure-prevention process.
NCCOB says it hopes that bank servicers with large numbers of delinquent mortgage loans will consider adopting similar procedures to reduce the potential of unnecessary foreclosures. NCCOB first proposed the rules in November 2009. The rules were adopted by the commissioner and approved by the State Banking Commission on March 17, and the Rules Review Commission approved the rules on April 16.