CFPB prioritizes Reg X

The CFPB has moved Regulation X mortgage servicing reforms into a high‑priority bucket in its current rulemaking and supervisory agenda, with a particular focus on loss‑mitigation, foreclosure timelines, and “streamlining mortgage servicing for borrowers experiencing payment difficulties.”

What “prioritizes Reg X” means right now

• In the CFPB’s most recent rulemaking agenda, “Streamlining Mortgage Servicing for Borrowers Experiencing Payment Difficulties (Regulation X)” is listed in the final rule stage, signaling that Reg X servicing changes are among the Bureau’s top near‑term regulatory priorities.

• Trade commentary is already framing 2026 as the window in which the CFPB could finalize substantive Regulation X updates, while other mortgage rules (like LO Comp changes) look comparatively stalled.

• At the same time, industry groups (MBA, ABA, etc.) are actively lobbying around the proposal, arguing that the Bureau’s framing of loss‑mitigation incentives and foreclosure‑fee restrictions could have “unfortunate and unhelpful outcomes” if finalized as drafted.

Key Reg X servicing themes in play

• Loss‑mitigation framework redesign: The proposal materially reshapes the loss‑mitigation review framework, including when foreclosure protections attach and how “dual‑tracking” is handled under a new “loss mitigation review cycle” concept.

• One‑review‑per‑delinquency: MBA and others are specifically pushing the CFPB to retain or restore the existing “one review per delinquency” standard to avoid perpetual or overlapping review obligations.

• Fees and third‑party costs: The CFPB has proposed limits on servicers’ ability to recover certain servicing fees and third‑party costs, and on advancing the foreclosure process, as a way to nudge earlier borrower engagement; industry is asking the Bureau to drop or soften fee prohibitions.

• COVID‑era clean‑up: The Bureau has already rescinded its special COVID‑19 RESPA/Reg X safeguards as no longer necessary, which clears the deck for a more durable, generalized servicing framework for “payment difficulties,” not just pandemic‑related hardship.

How this fits into the broader CFPB priority stack

• By moving “Streamlining Mortgage Servicing (Reg X)” into the final rule stage while de‑prioritizing other pieces (e.g., rescission of the nonbank orders registry and dialing back enforcement of the 1071 small‑business lending rule), the CFPB is effectively reallocating capacity toward mortgage servicing/Reg X work.

• The Bureau’s own description of the agenda emphasizes “pressing threats to American consumers,” and positions mortgage servicing reforms under Reg X as a central part of that consumer‑protection push, alongside data‑transparency and remittance transfer work.

Practical implications for servicers and collectors

• Servicers should assume that Reg X servicing reforms will finalize ahead of many other open CFPB projects and should prioritize operational impact analysis, especially around foreclosure‑timing, loss‑mitigation workflows, and recoverability of default‑related fees.

• Industry comment letters are trying to shape the final rule toward clearer triggers for dual‑tracking protections, preservation of “one review per delinquency,” and more flexibility on fees; the final contours will determine whether these changes are primarily procedural or also strongly economic for default servicing and investors.