Servicing Government Loans

Reference Resources

MBA drives alignment in servicing policy among FHA, VA, and USDA Rural Housing mortgages to lower servicing costs and improve borrower outcomes

Overview: Rise in default and increased regulatory burden saddled servicers in the last decade with rapid increases in servicing costs for government insured and guaranteed mortgages. MBA's Loan Administration Committee works to enumerate pain points and potential areas of alignment between the agencies to advocate for sensible policy revisions for a brighter future. Clear and consistence guidance leads to more equal outcomes for borrowers, and reductions in cost and headaches for servicers encourage greater participation in government programs designed to aid vulnerable populations.

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NEW WHITE PAPER: Improving Default Mortgage Servicing Processes: Opportunities for Alignment and Standardization

Following the foreclosure crisis of 2008, federal foreclosure prevention programs and consumer protection laws were put into place that provided more standardization and alignment of loss mitigation and foreclosure processes across the industry. However, key differences still remain in default servicing requirements, resulting in different servicing protocols depending on who owns, insures, or guarantees the mortgage. This white paper identifies areas where greater alignment or standardization could benefit borrowers or communities and/or improve servicing efficiencies while reducing costs and mitigating losses for federal guarantors and insurers.