Comment Letter: Request for Information (RFI) on Mortgage Refinances and Forbearances, Docket No. CFPB-2022-0059

The Partners for Rural Transformation (PRT) recognizes that the racial wealth gap is deep, and the economic and social benefits of closing it are vast. The financial system, particularly banks’ lending practices, has been a driving factor in this gap, and must play a significant role in closing it. The effects of the racial wealth gap can be seen nation-wide, specifically in the clusters of persistent poverty counties, where all of PRT’s Partners live in and serve.


Homeownership is critical for wealth generation. Mortgage lending is a key component in combatting and closing the racial wealth gap in the nation. The Partners provide financial options that meet people where they are, allowing communities and families to meet their full potential; starting with achieving homeownership.

One major contributor to the gap in homeownership includes uneven access to mortgage loans. PRT suggests the following points be considered to unlock the full potential of homeowners in persistent poverty areas:


  • More proactive outreach should be done for borrowers who would benefit from a refinance. One PRT partner staff member said, “Lenders aggressively contact borrowers who miss a payment, but do not reach out when something would benefit the borrower.” More advertising is needed for refinancing, as overwhelming amounts of advertising in the industry are focused on purchases.
  • Servicers should be required to contact borrowers about the opportunity to refinance their loan in the case of a rate reduction that would lower a borrower’s payment by a certain amount (i.e. a 10% reduction) and, as stated by Urban, “with thresholds ensuring the borrower unambiguously benefits from a refinance.” (1)

Prior to COVID-19, persistently poor, rural and Native communities were already dealing with the pre-existing crises of racial and economic inequality. Forbearances were vital to preserving homeownership during the COVID-19 pandemic and provided an opportunity for many lessons learned in the implementation and resolution of such widespread loss mitigation challenges. Recommendations building on this experience include:

  • Managing economic challenges in a disaster. Appalachia has faced flooding and tornadoes, the rural west and Native communities have faced fires, just to name a few. In these cases, PRT Partners will often offer targeted, streamlined, time-limited forbearances to borrowers in the affected areas.
  • PRT Partner mortgage teams expressed concern about implementing widespread “automatic” forbearances in the future without a near term, specified end date. The combined loss of regular income from missed payments and the administrative challenges of the loss mitigation process without increased operational support would be very difficult for smaller lenders, which include many minority-owned lending institutions.
  • In a future disaster, PRT would support a time limited deferral in place of a forbearance, to simplify the loss mitigation process.
  • Having loss mitigation done in house, even with a subservicer that handles other servicing activities. PRT Partner mortgage teams expressed that an in-house loss mitigation team can be more hands on with members and use manual underwriting for modifications.


Click here for more statistics on the racial wealth gap, the programs and services PRT Partners offer to close this gap, and PRT’s full comment on potential solutions.



(1) Alexei Alexandrov, Laurie Goodman, and Ted Tozer, The Urban Institute, “Streamlining Refinance to Expand Availability,” September 2022 available at

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