Joint Comments on Modernization of Engagement with Mortgagors in Default

Dear Commissioner Gordon:

The Mortgage Bankers Association (MBA), American Bankers Association (ABA), Housing Policy Council (HPC), and the National Mortgage Servicing Association (NMSA) (the Associations) respectfully submit these comments in response to the Department of Housing and Urban Development's (HUD) proposal to modernize the rules applicable to a Federal Housing Administration-insured (FHA) mortgage servicer's engagement with a borrower in default.

The Associations appreciate HUD's proposal. As HUD is aware, the industry has for many years urged HUD to eliminate the anachronistic requirement for FHA-insured mortgage servicers to conduct in-person meetings ("Face-to-Face") with borrowers who are in default on their mortgage payments. Indeed, we support the goal of providing greater flexibility for mortgage servicers to educate borrowers on available loss mitigation solutions utilizing modern communication technology in a manner that preserves important consumer protections. As our industry continues to emerge from the COVID-19 pandemic and mortgage servicers simplify processes to improve borrower outcomes, borrowers facing financial hardship should be able to continue to engage with their servicers through methods of contact that have proven their effectiveness and ability to reach borrowers.

FHA intends to implement the proposed regulatory changes through formal guidance in a Mortgagee Letter and later in the 4000.1 Single-Family Housing Policy Handbook. We support this approach to preserve operational and technological flexibility.

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