- Servicers have an obligation to act in the best interests of the owners/investors of serviced residential mortgage loans and in accordance with the terms of the governing contract. Any decisions that are not anticipated to produce a greater recovery to investors given the alternatives may constitute a breach of that duty.
- Regardless of any potential effect on the subordinate lien loan, servicers should modify the first lien mortgage when doing so would produce a greater anticipated recovery to the first lien owners/investors than not modifying the loan. Failure to do so may be a breach of the servicer's obligation to those owners/investors.
- Similarly, regardless of any potential effect on the first lien mortgage, servicers should modify the subordinate lien loan when doing so would produce a greater anticipated recovery to the subordinate lien owners/investors than not modifying the loan. Failure to do so may be a breach of the servicer's obligation to those owners/investors.
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
Chief Loan Officer
Chief Compliance Officer
Statement on Working with Mortgage Borrowers
Statement on Loss Mitigation Strategies for
Servicers of Residential Mortgages (FIL 76-2007),
Supplemental Information for Loss Mitigation
Strategies (FIL 77-2007),
Interagency Guidance on Nontraditional Mortgage
Product Risks (FIL 89-2006), and
Statement on Subprime Mortgage Lending (FIL 62-2007)
Examination Specialist Beverlea S. Gardner at
BGardner@FDIC.gov or (202) 898-3640
FIL-45-2009 - PDF (PDF Help)
FDIC financial institution letters (FILs) may be
accessed from the FDIC's Web site at
To receive FILs electronically, please visit
Paper copies of FDIC financial institution letters
may be obtained from the FDIC's Public Information
Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).