An end to pandemic-era loss mitigation provisions is not a return to norms
By MBA Newslink
Aug. 14, 2025
Big changes are coming to loss mitigation rules starting October 1. At ICE, we have been working closely with our clients to help them get ahead of it. Read this HousingWire article by Vicki Vidal, our Regulatory Associate General Counsel, where she breaks down five key areas every servicer should be thinking about when prepping for these loss mitigation changes. Below is an excerpt, with a link to the full article following.
Servicers have known the loss mitigation waterfalls enacted during the COVID-19 pandemic were eventually going to change. But a recent acceleration of the new governance has left the industry with only six months to make critical adjustments to loss mitigation workflows.
When the U.S. Department of Housing and Urban Development (HUD) issued a Mortgagee Letter outlining the loss mitigation program changes, the effective date was set for February 2026. However, a new letter issued in April moved the implementation deadline up to Oct. 1, 2025, leaving servicers with a much tighter time frame to ready their teams and technology to comply with the new requirements.
According to HUD Mortgagee Letter 2025-12, the changes are intended to “prevent foreclosures while protecting taxpayers and mitigating financial risks to the Mutual Mortgage Insurance Fund (MMIF).” One common problem these changes are trying to address is loss mitigation churning —where customers repeatedly switch between different loss mitigation options without making progress towards financial stability. And while the spring 2025 Mortgagee Letter from HUD goes into detail about the new requirements, there are still many questions from servicers as they face the rapidly approaching deadline.
Related resources
- Access dataAccess Mortgage Monitor reports
- Download now2026 Borrower Insights Survey report
- View nowFollow us on Linkedin