The American Bankers Association and three associations last week said they support the reasoning behind a proposed rule change to end the requirement for Federal Housing Administration-insured mortgage servicers to conduct in-person meetings with borrowers who are in default on their mortgage payments. The Department of Housing and Urban Development in July proposed the rule change, which would make permanent a temporary waiver lifting the face-to-face meeting requirement during the COVID-19 pandemic. Parties would instead be allowed to meet using videoconference software, telephone calls or whatever other electronic communications that the agency deems appropriate.
In a joint letter, the groups urged HUD to extend the temporary waiver through 2024 as the agency considers the rule change. The letter also made several suggestions on how HUD can provide greater certainty and clarity to servicers and borrowers before servicers are required to adjust their processes.
“[W]e 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,” the associations said. “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.”
