New proposal would ban most foreclosures until 2022. 

A wave of foreclosures and evictions threatens to arrive when pandemic-related pauses expire later this year, and the Consumer Financial Protection Bureau is considering restrictions on mortgage servicers that would spread the hit into 2022.

More than 3 million households are behind on their mortgage payments, and nearly 1.7 million will run out their forbearance periods in September, according to the bureau.

“We are at really an unusual point in history,” said Diane Thompson, a senior adviser at the bureau. “I don’t think anybody has ever before seen this many mortgages in forbearance at one time that are expected to exit at one time.”

So the bureau has come up with a proposal to ensure that homeowners don’t go straight from forbearance to foreclosure.

The agency proposed a new rule that would prevent servicers from starting foreclosure proceedings until after Dec. 31. The intent, bureau officials said, is to give borrowers coming off forbearance time to consider their options, such as whether they need a mortgage modification to reduce their monthly payments. The restriction would apply only to mortgages on homes used as primary residences.

The agency also proposed a rule change that would allow servicers to extend loan modification offers to borrowers experiencing a Covid-related hardship without undertaking the full review normally required to adjust a mortgage. The intention is to let lenders quickly offer borrowers more affordable terms, so long as the change does not increase the borrower’s monthly payment or extend the loan’s term by more than 40 years.

The consumer bureau is seeking public comment on its proposals, a required step in the rule-making process that will allow industry groups a chance to raise concerns about the changes.

The Mortgage Bankers Association, a housing industry trade group, did not immediately comment on Monday.