Under the new requirements of RESPA, if a bank does not have any formal loss mitigation options or procedures, are we now required to have some? I saw that the regulation does not dictate what loss mitigation options we have to offer customers, but I don't see anything that says we don't have to offer any options at all, so that would imply to me that we have to have something to offer, whether it is a re-evaluation of the credit or something basic. Am I correct?

You are not required to offer loss mitigation options, but it would be unusual for a bank to not have any..you are doing modifications, forbearance agreements, etc. now when people have problems, are you not? The bank doesn't just jump right to foreclosure every time when a mod or forbearance could mean collecting the whole balance eventually rather than force sale and take a loss.

Actually,my bank does have loss mitigation options, but one of our sister banks doesn't and asked me the question. And of course now they are arguing with me over the prohibition of a first filing or notice of foreclosure before the customer is at least 120 days delinquent because that can create bigger losses and it doesn't protect the bank at all. I reminded them that's why it's called a consumer protection law....

How can a bank not have any loss mitigation options? Do they always just foreclose on collateral without ever modifying or using a forebearance agreement, postponing payments, etc.?