Regulatory Alerts2012-07-11
Added · Updated
Guidance on a Lender’s Decision to Discontinue Foreclosure Proceedings
The Federal Reserve issued joint guidance requiring state member banks and holding companies with residential mortgage servicing operations to implement robust risk management practices for abandoned foreclosures. The document mandates that lenders notify borrowers of their rights and obligations, contact local authorities, and regularly monitor collateral values before deciding to discontinue foreclosure proceedings. Supervisory examinations will assess compliance with these notification and valuation requirements to ensure prudent business practices and minimize adverse effects on communities and property owners.