Loss Mitigation: A Hot Topic Gets Hotter

The 2016 Final Rule amended Regulation X's loss mitigation procedures, imposing additional obligations that may be entirely new to mortgage servicers. For example, in the short-term forbearance and repayment context (where there previously was little guidance and structure), servicers are required to send a written notice confirming the terms of any short-term plan that is offered to a borrower. Servicers also now have specific procedures to follow in the area of loss mitigation if and when 1) all required loss mitigation documentation and information in a borrower's control has been received, but 2) information needed from a third party is missing.

The complete article first appeared in the January/February Issue of the ABA Bank Compliance magazine.