On August 2, 2016, the Consumer Financial Protection Bureau (“CFPB”) published a new guidance document titled CFPB’s Principles for the Future of Loss Mitigation (the “Guidance”), which outlines a recommended framework for new, industry-driven foreclosure relief programs. The Guidance largely follows the July 25, 2016, white paper jointly issued by the U.S. Department of the Treasury (“Treasury”), the U.S. Department of Housing and Urban Development (“HUD”), and the Federal Housing Finance Agency (“FHFA”) (collectively, the “Agencies”), in which the Agencies called for industry stakeholders to design and implement a loss mitigation framework tailored to the post-crisis mortgage market (the “White Paper”). Importantly, both the Guidance and the White Paper come as Treasury’s Home Affordable Modification Program (“HAMP”) is set to expire on December 31, 2016.

HAMP was established in 2009 as part of the Making Home Affordable (“MHA”) Program, which Treasury and HUD created under the broad authority of the Emergency Economic Stabilization Act of 2008, 12 U.S.C. 5201 et seq. The MHA Program, particularly through HAMP, established uniform standards for loss mitigation and loan modification policies and procedures across the mortgage servicing industry. Over time, the MHA Program expanded significantly. The responsible federal agencies refined borrower eligibility criteria for HAMP loan modification options, and other stakeholders (e.g., the FHFA) set up companion programs designed to serve borrowers that were ineligible for HAMP. According to the White Paper, an estimated 10.5 million modifications and mortgage assistance arrangements were completed through HAMP and related programs between April 2009 and May 2016.