A total of 3,262,036 HELOCs with an estimated total balance of $158 billion that originated during the housing price bubble between 2005 and 2008 are still open and scheduled to reset between 2015 and 2018.
Realty Trac the nation’s leading source for comprehensive housing data, today released its first-ever U.S. HELOC Resetting Report, which found that 56 percent of the 3.3 million Home Equity Lines of Credit potentially resetting with higher, fully amortizing monthly payments from 2015 to 2018 are on properties that are seriously underwater.
With 645,872 HELOCs, California led the way among the states in terms of sheer volume of resetting HELOCs. A total of 423,706 (66 percent) of those resetting HELOCs in California are on homes that still seriously underwater
The Consumer Financial Protection Bureau (CFPB) has recently proposed additional set of measures to expand foreclosure protections for mortgage borrowers.
Currently the CFPB continues engaging in the outreach task along with consumer advocacy groups, industry representatives, and other stakeholders to develop additional provisions to protect consumers and make it easier for companies to comply with the rules. New proposals would give greater protections to mortgage borrowers.
Among these new proposals are a number of provisions to improve borrower/servicer communications and to clarify previous regulations, such as,
Protections for mortgage heirs
Servicers would be required to notify borrowers when their loss mitigation applications are complete and when their foreclosure protections kick in
The proposal offers full disclosure on “clarifications” from previous rules dealing with servicing rights transfers between firms.
Would require servicers to provide periodic loss mitigation information and other statements to borrowers in bankruptcy.
Servicing firms must also provide written early intervention notices to let those borrowers known about their loss mitigation options even after they’ve been told to stop contact.
Clarifying the meaning of “delinquency” for the purpose of its servicing rules. Delinquency begins on the day a borrower fails to make a periodic payment. If that payment is later made up, the bureau proposes that the date of delinquency should be pushed up creating room for servicers to consider a payment as “timely”.