The Covid-19 pandemic suddenly and unexpectedly affected the financial circumstances of millions of people throughout the world. Many were left unemployed, and thus unable to make mortgage payments.

The federal government stepped in to ensure the short-term impacts of the pandemic didn’t yield long-term crises. For example, through mortgage forbearance programs, many homeowners were allowed to stop making payments until they were able to restore their financial health.

However, while the pandemic may be technically winding down, its impacts on the economy are still felt. It may be some time before a full economic recovery is possible.

Thus, some have worried that mortgage forbearance and payment suspension programs may be eliminated or reduced too early.

It’s not currently possible to determine with absolute accuracy whether homeowners will continue to have options to financially recover before their homes are foreclosed on. That said, there is reason to believe they may have some “breathing room” for another year or so.

Specifically, officials at the Consumer Financial Protection Bureau want to establish safeguards and make policy adjustments to limit the rate of foreclosures in the immediate aftermath of the pandemic.

According to CFPB Acting Director Dave Uejio, “The CFPB is proposing changes to the mortgage servicing rules that will ensure servicers and borrowers have the tools and time to work together to prevent avoidable foreclosures, which disrupt lives, uproot children and inflict further costs on those least able to bear them.” Uejio has also pointed out that certain marginalized communities have been disproportionately impacted by the pandemic’s impact on the ability of homeowners to make mortgage payments. He and his colleagues believe they have a responsibility to protect such communities.

One proposed new rule would establish a mandatory pre-foreclosure review period. This would prevent mortgage servicers from initiating foreclosure processes until 2022. Additionally, the CFPB is striving to make changes to the loan modification process in order to allow homeowners to more quickly enter into new agreements that involve more affordable monthly payments. Instead of having to gather and submit numerous documents to modify loans, these changes would help homeowners make adjustments far more efficiently.

Officials at the CFPB will also have to closely monitor mortgage servicers to ensure they comply with the new rules and changes. According to CFPB reports, in March of 2021, the agency received more complaints from consumers in a single month than it had received since April 2018.

Many of the complaints indicated mortgage servicers have failed to provide homeowners with thorough and clear information regarding the various options available to them during this difficult time. Others stated that loan modifications have been unreasonably delayed or denied. Thus, the CFPB will likely be actively involved in overseeing the rollout of the proposed changes to confirm they’re yielding the desired effect.

Again, this is a developing story. It’s not yet clear how the proposal will impact foreclosures in the coming year. Homeowners should pay close attention to new developments to ensure they fully understand the circumstances.