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Loan Servicing Standards

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Housing programs play a vital role in helping low- to moderate-income, minority borrowers, and eligible veterans and servicemembers realize the dream of homeownership. MBA works with the agencies to improve servicing efficiency and reduce servicing costs. Clear and consistent guidance leads to more equal outcomes for borrowers, reductions in cost for servicers, and encourages greater participation in programs designed to aid vulnerable populations.

Read: Why the Bureau’s Servicing Proposal Is Problematic

In July 2024, the Consumer Financial Protection Bureau proposed broad amendments to Regulation X’s loss mitigation procedural framework for borrowers to request and receive assistance when facing financial hardship. The proposal includes a prohibition on servicing and third-party fees, a ban on advancing the foreclosure process during loss mitigation reviews, and a conceptual outline of new requirements to expand language access to loss mitigation translations for limited English proficiency borrowers. Learn about:

Core principles for reform
Recommendations for the CFPB
Myths and facts on servicers' role during loss mitigation

Read the report here.

Read: Partial Claim Processing Delays: Risks and Solutions

The significant volume of partial claims completed throughout the COVID-19 pandemic have led servicers of FHA-insured mortgages to repeatedly receive notices from FHA’s Mortgagee Compliance Manager (MCM) demanding return of insurance funds for missing partial claim documents. Learn about:

The impact of delays on servicers
Recommended changes to regulation
Immediate actions to ameliorate delays

Read the flyer here.

Read: VA Partial Claims: Establishing a Permanent Program to Assist Veteran Borrowers

Veteran borrowers facing financial hardship should have access to additional tools to resolve delinquency and avoid foreclosure. The partial claim option available to FHA and USDA borrowers is not a tool in the Department of Veteran’s Affairs (VA) suite of loss mitigation options. Learn about:

Actions by Congress
Benefits of a Partial Claim Program
Impact to the VBA