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Home > News & Events > 2007 Banking and Consumer Regulatory Policy

Joint Press Release

Print

Conferences

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision
National Credit Union Administration
Conference of State Bank Supervisors

For immediate release

September 4, 2007

Federal Financial Regulatory Agencies and CSBS Issue Statement on Loss Mitigation Strategies for
Servicers of Residential Mortgages
The federal financial regulatory agencies and the Conference of State Bank Supervisors (CSBS) on Tuesday issued a statement
encouraging federally regulated financial institutions and state-supervised entities that service securitized residential mortgages
to review to determine the full extent of their authority under pooling and servicing agreements to identify borrowers at risk of
default and pursue appropriate loss mitigation strategies designed to preserve homeownership.
Significant numbers of hybrid adjustable-rate mortgages will reset throughout the remainder of this year and next. Many
subprime and other mortgage loans have been transferred into securitization trusts that are governed by pooling and servicing
agreements. These agreements may allow servicers to contact borrowers at risk of default, assess whether default is
reasonably foreseeable, and, if so, apply loss mitigation strategies designed to achieve sustainable mortgage obligations.
Servicers may have the flexibility to contact borrowers in advance of loan resets.
Appropriate loss mitigation strategies may include, for example, loan modifications, deferral of payments, or a reduction of
principal. In addition, institutions should consider referring appropriate borrowers to qualified homeownership counseling
services that may be able to work with all parties to avoid unnecessary foreclosures.
The statement, which was issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union
Administration, and CSBS, is attached.
Attachment (21 KB PDF)
Media Contacts:
Federal Reserve Board

Susan Stawick

202-452-2955

FDIC

Andrew Gray

202-898-7192

OCC

Kevin Mukri

202-874-5770

OTS

William Ruberry

202-906-6677

NCUA

John McKechnie

703-518-6331

CSBS

Mike Stevens

202-728-5701

2007 Banking and Consumer Regulatory Policy

Last update: September 4, 2007

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