On March 2, 2016, FDIC announced clarification of its previous guidance regarding institutions’ risk management practices on whether to discontinue foreclosure proceedings.
The guidance requires institutions to create policies and practices regarding institutional decisions to abandon foreclosure. Specifically, the guidance reminds institutions of the requirement to develop policies and procedures regarding obtaining current property information to assess the foreclosure proceeding, criteria for releasing liens, notification to state and local authorities, and notification to the borrower of the discontinued foreclosure.
The FDIC notes that its supervisory activities will include reviewing institutional policies and practices regarding abandoned foreclosures, including during safety and soundness examinations as well as consumer protection examinations.
The FDIC’s release is available at: https://www.fdic.gov/news/news/financial/2016/fil16014.html?source=govdelivery&utm_medium=email&utm_source=govdelivery.