On June 3, HUD published Mortgagee Letter (ML) 2025-14, “Updates to Modernization of Engagement with Borrowers in Default and Loss Mitigation,” which revised requirements for mortgagee interviews with FHA borrowers in default and streamlined loss mitigation procedures. The notice revised the guidance from ML 2024-24, “Modernization of Engagement with Borrowers in Default,” and provided technical corrections to ML 2025-12, “Tightening and Expediting Implementation of the New Permanent Loss Mitigation Options.”
ML 2025-14 significantly revised previous requirements by replacing the requirement for a “Loss Mitigation Consultation” with an “Interview,” and emphasized a more flexible and streamlined approach for the required interview. The changes, effective July 1, will address what HUD determined were “unnecessarily burdensome” requirements from previous guidance. A second set of modifications, effective October 1, will update several key areas, including homeownership counseling availability, loss mitigation home retention options, and disaster forbearance procedures for borrowers in presidentially declared major disaster areas.
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