Attorney General Bonta: FHA Must Require Mortgage Servicers to Take Affirmative Action to Help Struggling Homeowners Access Critical Relief

Tuesday, December 21, 2021
Contact: (916) 210-6000,

OAKLAND – California Attorney General Rob Bonta today, as part of a multistate coalition, urged the Federal Housing Administration (FHA) to address mortgage servicers’ failure to adequately implement the agency’s COVID-19 Recovery option. If an eligible homeowner with an FHA-insured loan cannot make their monthly mortgage payments because of COVID-19, the mortgage servicer is required to review the loan to see if they qualify for the FHA’s COVID-19 Recovery Modification, a loan modification that lowers their monthly payments by extending the length of their mortgage. The FHA intended for this loan modification option to help struggling homeowners, including low-income households, first-time homeowners, and households of color that have been disproportionately impacted by the pandemic. Unfortunately, the coalition has received reports that mortgage servicers are failing to inform homeowners of this option, incorrectly denying that this option exists, and requiring unnecessary paperwork or other conditions for this option.

“Since the pandemic began, we've seen sweeping action at the local, state, and federal level aimed at keeping vulnerable Californians in their homes and our economy afloat. From direct stimulus payments to pausing student loan payments, it's been a multi-pronged, all hands on deck approach,” said Attorney General Bonta. “For many in California and across the country, a monthly mortgage payment is their biggest expense. That's why FHA’s efforts to assist struggling homeowners have been so critical. But unfortunately, some of its programs are not being adequately implemented. I join my colleagues in urging FHA to require mortgage servicers to take affirmative action to help struggling homeowners access this critical relief.”

Since COVID-19 began, the FHA has taken action to help ensure that struggling homeowners are able to remain in their homes. As part of this effort, the FHA required servicers of FHA-insured mortgages to inform eligible homeowners of the COVID-19 Recovery Modification option beginning in October 2021. Unfortunately, the coalition has received reports that many mortgage servicers are failing to make eligible homeowners aware of the COVID-19 Recovery Modification and are imposing unnecessary conditions on or providing false information to homeowners about its availability.

In today’s letter the coalition urges the FHA to require these mortgage servicers to take affirmative steps to implement the COVID-19 Recovery Modification, including:

  • Affirmatively offering available loan modification options to eligible bowers; 
  • Ensuring that all communication to borrowers includes complete information about their COVID-19 Recovery options; and 
  • Training of customer-service staff to ensure that borrowers are adequately assisted in accessing COVID-19 Recovery options.

Attorney General Bonta is committed to advancing housing access, affordability, and equity in California. Last month, Attorney General Bonta announced the creation of a Housing Strike Force within the California Department of Justice and the convening of a series of tenant roundtables across the state. The Housing Strike Force encourages Californians to send complaints or tips related to housing to Attorney General Bonta also launched a Housing Portal on DOJ’s website with resources and information for California homeowners and tenants. Information on legal aid in your area is available at

Attorney General Bonta joins the attorneys general of the District of Columbia, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington in sending the letter.

A copy of the letter is available here.

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