By Jeffrey Fox, Esq.

Rosenberg& Associates, LLC *

USFN Member (DC, MD, VA)

Congress recently passed the “21^st Century ROAD to Housing Act” (hereinafter “the bill”), the largest housing legislation in decades. Although the President did not sign it, by operation of law, the bill became law overnight on Friday, July 10, 2026. While the focus of the bill is on housing affordability and supply, certain provisions of the bill could affect mortgage default servicing.

The first, and possibly most significant area of impact for the bill appears to be point of loan origination. Title IX of the bill seeks to expand banking services among rural and minority populations. Sections 906 through 909 specifically seek to ease the establishment, support, and mentoring of newer and “de novo” institutions in these areas.

Section 906 amends Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463) to establish a Mentor-Protégé program. The intent of the amendment is that established institutions will help guide the new institutions that subsequent sections of this title seek to encourage.

Section 907 seeks to streamline the application process for establishing new institutions. The section requires the appropriate federal agencies to review the application process and submit annual reports for five years, recommending changes to encourage more applicants. It also requires that, upon request, applicants be assigned a caseworker and/or provided a list of appropriate mentor institutions.

Section 908 gives qualifying institutions, or their holding companies, two years to meet applicable federal capital requirements. Qualifying institutions are those that benefit underserved communities. The section also requires federal banking agencies to study the program’s effectiveness and submit a report to Congress.

Finally, section 909 requires the federal banking agencies and the National Credit Union Administration to prepare a study for Congress identifying federal statutes or agency regulations that limit the establishment and growth of rural banking institutions.

If successfully implemented, these sections of the bill will lead to the establishment of several new banking institutions. New banks mean new policies and procedures. When the mortgages issued by these new institutions inevitably become available on the after-market, they will require extensive vetting.

Title X has been the headline grabbing section of this bill. The Title consists of a single section, Home Ownership for Main Street America. In very broad terms, it attempts to limit larger corporate entities from taking over too much of the residential real estate market and thus encourage individuals to buy those properties. Specifically banning large investors who own 350 or more properties from purchasing additional single-family homes. However, there is a lengthy list of exceptions contained within the bill. Section 1001 (2)(G) specifically excepts foreclosure properties. This would seem to remove Title X’s limiting provisions from the area of mortgage default.

            While the “21^st Century ROAD to Housing Act” as currently written does not include many hurdles to the mortgage default industry, its implementation bears watching. If nothing else, the bill represents the federal government’s increasing interest in inserting itself into the broader mortgage industry in general; and as always, that’s worth keeping an eye on.

Copyright © USFN 2026

USFNews - July 22, 2026

* Denotes firm is a 2024 Award of Excellence recipient.

New ADMT requirements reshape oversight for servicers

By Carly Imbrogno, Esq. and

Marcello Rojas, Esq.

BDF Law Group *

USFN Member ( AL, AZ, CA, CO, GA, MS, NV, OK, TX, WY)                                                                       

In 2024, Colorado passed the Consumer Protection for Artificial Intelligence Act to protect consumers in their interactions with artificial intelligence systems. The 2024 law established broad and ambiguous obligations for developers of artificial intelligence systems. Initially scheduled to become effective February 1, 2026, the law's effective date was deferred to June 2026. The legislation mandated that AI developers and deployers of high-risk systems actively mitigate algorithmic discrimination. Specifically, affected businesses were required to conduct risk assessments, notify consumers when AI influences major outcomes, establish clear governance frameworks, and openly disclose their strategies for preventing bias.

The AI industry and Colorado Governor Jared Polis quickly pushed back, warning that the law went too far. Critics immediately described it as the nation's most aggressive state-level AI framework, drawing direct comparisons to the European Union’s strict AI Act. Ultimately, the Colorado AI Act marked a major turning point in U.S. technological governance. It proved that state legislatures will not wait for Congress to act; instead, they are ready to step in and impose heavy compliance demands directly on AI developers and users.

To address the concerns that have been raised, Colorado recently passed Senate Bill 26-189, titled Automated Decision-Making Technology, which is a step back from the 2024 law.  The 2026 Act repeals and reenacts provisions with new requirements regarding the use of automated decision-making technology (ADMT). This consequential Act will take effect on January 1, 2027.

Scope

Under the law, ADMT broadly covers any technology that processes personal data and uses computation to generate predictions, recommendations, classifications, rankings, or scores to guide decisions about individuals. A system qualifies as a “covered ADMT” when its outputs "materially influence a consequential decision.” A consequential decision is defined as a decision that materially impacts an individual's access to, eligibility for, or compensation related to education, employment, housing, financial/lending services, insurance, healthcare, or essential government benefits.

The law divides regulatory responsibility between technology creators and the businesses implementing the technology.

Rules for Technology Creators (Developers)

Developers, defined as “a person doing  business in Colorado that, develops, offers, sells, leases, licenses, or otherwise makes commercially available a covered ADMT; develops a component that is designed, marketed, intended, documented, advertised, configured, or contracted to be used as part of ADMT; or intentionally and substantially modifies an ADMT such that it becomes a covered ADMT, must explain what the AI is meant for, what data it was trained on, and how deployers should monitor it.” Additionally, developers must furnish deployers with comprehensive technical documentation detailing the system's intended uses, training data categories, known limitations, and operational protocols for human review. They must also notify deployers of any material software updates and retain compliance records for a minimum of three years.

Rules for Companies Using the Technology (Deployers)

Deployers are defined as a person doing business in Colorado that deploys a covered ADMT. Deployers using AI to make significant decisions must provide clear and conspicuous notice to consumers at the point of interaction with a covered ADMT. When AI is used to make a significant decision, deployers must maintain record of such decision, and how it is compliant with the Act for three years. Deployers must inform consumers that they are using AI when they interact with it. Additionally, if the AI gives a consumer a negative result, such as denying a loan, the deployer has 30 days to explain what role the AI played in that decision-making process. Lastly, consumers have the right to review the data that was used, fix mistakes, and demand human review and reconsideration of the AI’s decision. In summary, whenever AI is used in a significant manner and the result is adverse to a consumer, deployers should be aware that consumers can dispute the outcome, which will require human intervention. This intervention can ultimately slow down whatever process is at play.

How it Affects the Default Mortgage Servicing Industry

ADMT sounds technical, but the idea is simple. If a system is doing more than administrative work, such as shaping, guiding, or narrowing the outcome of a decision about a borrower, it may fall within the law’s scope. Think about the tools that support loss mitigation decisions, default or risk segmentation, workout recommendations, or pricing and eligibility adjustments. None of these tools are new in the industry. Under the new law, what matters isn’t whether a system is labeled AI, but whether it meaningfully influences what ultimately happens to the borrower. When such influence occurs, borrowers need to be notified.

            Servicers will need to be much clearer with borrowers when automated systems are part of the decision-making process. Servicers will need to be more candid when the interaction is actually happening. If a borrower receives an unfavorable outcome, the expectation isn’t just a standard notice. Servicers will need to explain what happened, and what role the ADMT played in that decision.

            Lastly, if a borrower requests reconsideration of the ADMT’s decision, meaningful human review will need to be conducted. Servicers must review the decision and information used, understand the context, and reconsider the outcome if needed.

Violations

Violations of the Act will be enforced by the Attorney General through the Colorado Consumer Protection Act, specifically as a deceptive trade practice. Once the Attorney General is made aware of such violations, a notice of violation must be issued, and then developers or deployers will have 60 days to cure. However, if the Attorney General can show that developers or deployers “knowingly” or “repeatedly” violated the Act, a cure period is not required before penalties are sought.

Violations now extend to civil liability. Developers and deployers may be found liable if ADMT is found to have made a consequential decision that is discriminatory.

Final Thoughts

Colorado's legislative pivot offers immediate regulatory relief, but it requires businesses to recalibrate, rather than abandon, their AI strategies.

·       Audit and Streamline Current Compliance: Servicers should audit their AI programs and compliance processes. The new framework eliminates previous burdens, and existing compliance roadmaps may be unnecessarily complex. Make note of the programs currently in use that make consequential decisions. Restructure your governance model to meet actual statutory demands.

·       Formulate Disclosures and Recordkeeping: Servicers should assemble the materials that will be provided to borrowers when AI is used in a consequential decision. Furthermore, servicers should develop their recordkeeping systems to prove compliance with the Act for three years.

·       Monitor the Shifting Dynamics Between Federal and State AI Legislation: Stay up to date on the shifting dynamic between state laws and federal policy. Although Congress faces constant pressure to pass a unifying federal AI law that could override state rules, the political cycle introduces unpredictability that businesses will need to continue to navigate as technology and laws change.

·       Reinforce Strategic Ethics: While state mandates are shifting from bans to transparency, baseline AI governance is still nonnegotiable. Establishing clear human oversight and open disclosures protects servicers from traditional discrimination claims.

Copyright © 2026 USFN

USFNews - July 8, 2026

* Denotes firm is a 2024 Award of Excellence Recipient.

U

By Keith L. Abramson, Esq.

Frenkel LambertWeisman & Gordon, LLP

USFN Member (FL, NJ, NY)

On May 20, 2026, the New York Appellate Division, Second Department, issued a Decision and Order in US Bank National Association v. Nelson, ___ N.Y.S.3d ___ (2d Dept. 2026), involving the borrowers’ attempt to amend their answers, post-Judgment of Foreclosure and Sale, to raise a defense that the plaintiff lacked standing.

RPAPL 1302-a, which became effective on December 23, 2019, states, in relevant part:

Notwithstanding the provisions of subdivision (e) of rule thirty-two hundred eleven of the civil practice law and rules, any objection or defense based on the plaintiff’s lack of standing in a foreclosure proceeding related to a home loan, as defined in paragraph (a) of subdivision six of section thirteen hundred four of this article, shall not be waived if a defendant fails to raise the objection or defense in a responsive pleading or pre-answer motion to dismiss.  A defendant may not raise an objection or defense of lack of standing following a foreclosure sale, however, unless the judgment of foreclosure and sale was issued upon defendant’s default.  (emphasis added). 

Since its enactment, defendants in foreclosure actions have tried to persuade the courts that RPAPL 1302-a allows defendants to raise a defense based on lack of standing “at any time.”  The Appellate Division’s decision in Nelson is the latest in a number of cases in which the court continues to dispel that notion[1].

To understand the court’s decision in Nelson, it is important to consider the procedural history of the case. Nelson was commenced in September 2009, a decade before RPAPL 1302-a was enacted. The defendants interposed timely answers to the complaint but did not include the defense of lack of standing. Plaintiff was awarded summary judgment in 2015 over the defendants’ opposition, and defendants did not attempt to raise the defense at that time. Later, when the plaintiff moved for a Judgment of Foreclosure and Sale, defendants opposed and filed a cross-motion, arguing for the first time, inter alia, that plaintiff lacked standing to commence the action. By Decision and Order dated December 15, 2015, the court granted the plaintiff’s motion and denied the cross-motion, holding that the standing defense should have been raised previously when plaintiff successfully sought summary judgment and an order of reference. The defendants’ first appeal followed.

On January 23, 2019, still prior to the enactment of RPAPL 1302-a, the Appellate Division, Second Department, affirmed the Judgment of Foreclosure and Sale, holding in part that the defendants waived the defense of lack of standing by failing to raise the affirmative defense in their answers. US Bank National Association v. Nelson, 169 A.D.3d 110, 93 N.Y.S.3d 138 (2d Dept. 2019). Defendants moved for leave to reargue the appeal or, in the alternative, for leave to appeal to the Court of Appeals. The court denied leave to reargue but granted leave to appeal to the Court of Appeals.

On December 17, 2020, the New York State Court of Appeals handed down its Memorandum opinion affirming the order of the Appellate Division. The Court concluded that, “under the circumstances of this case, Supreme Court did not err in granting plaintiff’s motions for summary judgment and for a judgment of foreclosure and sale.” US Bank National Association v. Nelson, 36 N.Y.3d 998, 999, 163 N.E.3d 49, 139 N.Y.S.3d 118 (2020). The Court held that, under the law in effect at the time of the orders appealed from, the defense of lack of standing had been waived by the defendants by failing to raise standing in their answers or in pre-answer motions as required by CPLR 3211(e).  Id. The Court expressly stated that it did not reach the issue of whether RPAPL 1302-a, enacted while the appeal was pending, would afford defendants an opportunity to raise standing at this stage of the litigation, and the Court remitted to the Supreme Court for further proceedings.

Back in Supreme Court, the defendants moved for leave to amend their answers to add a defense that the plaintiff lacked standing, to vacate summary judgment and the judgment of foreclosure and sale, and for related relief. In their motion, defendants argued that, pursuant to RPAPL 1302-a, “the defense of standing is not waivable and can be raised at any time prior to a foreclosure sale.”  Plaintiff opposed, and the trial court, relying heavily on the language of the Court of Appeals’ opinion, held that “1302-a does not allow a defendant who defended the action on the merits to raise standing following the grant of judgment of foreclosure and sale.” Unlike at the motion for summary judgment stage, where attempts to raise standing for the first time should be credited, the court observed that “[t]here appears to be no appellate precedent supporting the proposition that a non-defaulting defendant can raise a standing defense post-JFS.”  Accordingly, the defendants’ motion was denied by the trial court. Once again, the defendants appealed.

The Appellate Division affirmed, holding that “the Supreme Court, upon determining that RPAPL 1302-a did not provide an independent basis to vacate a judgment of foreclosure and sale, properly denied the defendants’ motion”.  Nelson, supra, ___, N.Y.S.3d ___ (2d Dept. 2026). It remains to be seen whether the defendants will seek leave to appeal to the Court of Appeals, or whether such leave will be granted.  But for now, the law is clear: A defense that the plaintiff lacks standing may not be raised “at any time.”  More specifically, RPAPL 1302-a does not permit a non-defaulting defendant to raise a standing defense post-Judgment of Foreclosure and Sale.

Copyright © 2026 USFN

USFNews - June 10, 2026

Thomas Kivell, who helped found Kivell, Rayment & Francis, PC (USFN Member – OK), has recently passed away. USFN, on behalf of the board and staff, shares its condolences with his family, friends, and colleagues. Kivell founded Kivell, Rayment & Francis in 1991 with partners Joe Francis and Brian Rayment, and became an early member of USFN.

Baer Timberlake, P.C. (USFN Member – OK) has been recognized by The Oklahoman as one of Oklahoma’s Top Workplaces for 2025, an honor based entirely on employee feedback. The Top Workplaces designation is earned solely through employee responses and cannot be purchased. Survey participants provide feedback on key factors such as pay and benefits, leadership, direction, appreciation, and overall workplace culture. Companies with the highest ratings receive recognition. Founded in 1968, Baer Timberlake provides experienced legal counsel in real estate and related corporate matters. With decades of experience, Baer Timberlake remains committed to delivering efficient, knowledgeable, and reliable legal representation.

By Jason Cotton, Esq., and SallyGarrison, Esq.

The Mortgage Law Firm, PC *

USFN Member (AZ, CA, HI, NM, OK, OR, TX, WA)

The Washington Supreme Court recently issued an opinion that could materially alter foreclosure strategy for home equity products in the state and potentially influence broader national conversations about negotiability and enforcement rights. In Marquez Vargas v. RRA CP Opportunity Trust 1, No. 103735-0 (Wash. Apr. 30, 2026), the Court held that a HELOC note is a nonnegotiable instrument and, therefore, cannot support non-judicial foreclosure under Washington’s Deed of Trust Act (DTA) as currently written.

For the default servicing industry, this is not a technical footnote. It is a structural limitation on the use of Washington’s non-judicial process for a category of loans that has historically moved through foreclosure channels with relatively little distinction from traditional mortgage products.

The Core Holding

The Court’s holding – that a HELOC is not a negotiable instrument as defined by the UCC – was not exceptional; it keeps with most other states. Washington defines “negotiable instrument” at RCW 62A.3-104; it requires that the instrument define the debt as a “fixed amount of money.” The Court concluded a HELOC does not meet the UCC requirement of a promise to pay a “fixed amount of money.”

Unlike a traditional note with a fixed principal balance, a HELOC balance fluctuates based on draws and repayments. Although the line itself contains a ceiling, the amount owed is variable throughout the life of the instrument. According to the Court, that variability defeats negotiability.

Importantly, the Court rejected the reasoning adopted in certain other jurisdictions that a HELOC may become negotiable once the draw period closes. Instead, the Washington Supreme Court held that negotiability must be determined from the four corners of the instrument at origination. It means the determination cannot change during the life of a loan. A HELOC that begins as nonnegotiable remains nonnegotiable, regardless of later maturity or closure of ability to draw.

Having resolved that certified question, the Court moved on to whether the beneficiary of a nonnegotiable instrument could still use the DTA to foreclose non-judicially. “It shall be requisite to a trustee’s sale: … [t]hat, for residential real property of up to four units, before the notice of trustee's sale is recorded, transmitted, or served, the trustee shall have proof that the beneficiary is the holder of any promissory note or other obligation secured by the deed of trust. A declaration by the beneficiary made under the penalty of perjury stating that the beneficiary is the holder of any promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection.” RCW 61.24.030(7)(a). (Emphasis added).

The Court held that, under Washington law, a beneficiary seeking to foreclose through the DTA must provide a “holder declaration.” The Court determined that the term “holder” within the DTA is limited to parties in possession of negotiable instruments.

That distinction matters.

Why This Matters Operationally

The practical effect of the decision extends beyond standing arguments. The Court effectively held that the non-judicial foreclosure framework established by the DTA is unavailable where the instrument does not qualify as a negotiable instrument because of the use of the term “holder” and the significance of possession in determining standing – which are only relevant tests with respect to negotiable instruments.

The Court’s reliance on scholarly commentary is also notable. Citing Professor Dale Whitman, the opinion emphasized that possession alone is not a reliable indicator of enforcement rights for nonnegotiable instruments. The Washington DTA, as currently written, uses the UCC’s “holder” mechanism to establish standing. That reasoning potentially weakens assumptions that have historically underpinned transfer and enforcement practices within the industry.

That creates immediate operational consequences:

• Increased reliance on judicial foreclosure for HELOC products.
• Potential timeline extensions and increased litigation exposure.
• Portfolio segmentation concerns for loans with draw features.
• Review of transfer documentation practices.
• Additional title considerations.

This opinion not only creates a difficult operational reality for servicers operating in Washington, but it changes the borrower’s expectations related to equity. Non-judicial foreclosure has long been valued for predictability, efficiency, and cost control. Removing that option for certain products fundamentally changes the economics and risk profile of default servicing. For borrowers, judicial foreclosure is more expensive and that cost is assessed against the potential equity in the real property.

The Bigger Issue: HELOCs May Not Be Alone

The Court expressly addressed HELOCs, but the reasoning may reach beyond HELOCs.

Any product containing draw provisions or variable balance mechanisms may invite similar scrutiny. The decision raises broader questions for instruments that do not fit neatly into traditional negotiable-note analysis. This Court also has set a review framework: Can you identify the debt amount at the time of origination?

Looking Ahead

The Washington Legislature may ultimately need to address the issue directly if preservation of non-judicial foreclosure remedies for HELOC products is viewed as a policy priority. Until then, servicers, investors, foreclosure counsel, and trustees should carefully review affected portfolios and coordinate with local counsel regarding enforcement strategy.

The decision is a reminder that mortgage servicing does not operate in a static legal environment. Small definitional issues, like whether an instrument is “negotiable,” can have significant operational consequences.

Copyright © 2026 USFN

USFNews - May 27

* Denotes firm is a USFN 2024 Award of Excellence Recipient

By Andy Saag, Esq.

Tiffany& Bosco, P.A.*

USFN Member (AL, AZ, CA, FL, KY, NV, NM, OH, WV)

Executive Summary of HB315

On April 15, 2026, HB 315 became law in Alabama. The new law, which is effective October 1, 2026, authorizes, but does not require, Class 1 municipalities — which in Alabama means Birmingham — to require owners of vacant properties[1] to register, maintain, and pay fees for buildings sitting empty for more than three months. The law allows for a registration fee of $250 with a 150% increase per year, capping at $1,000, and the law may be enforced through unannounced inspections and fines, with unpaid fines potentially resulting in a lien being placed on the property. Property owners are generally required to register within 30 days of a property being deemed vacant or assuming ownership, or within 90 days if ownership was acquired through foreclosure. 

Why HB 315 May Matter to Foreclosure Buyers

If Birmingham adopts a vacant property registration program, as it is authorized to do, a servicer or investor that acquires a vacant property by foreclosure or deed in lieu of foreclosure inside city limits will be subject to the requirements of said program The ordinance may allow registration within 90 days after assuming ownership, and the same 90-day window also applies to the first subsequent transferee after the property has been acquired by foreclosure or deed in lieu. That extra time is helpful, but it is not a safe harbor against liability. 

Just as important, HB 315 does not let a foreclosure purchaser start with a clean slate. The law requires a vacant-property ordinance to provide that subsequent good-faith purchasers, parties who foreclose, and parties who acquire title by deed in lieu of foreclosure assume the obligations of the prior owner. That means the act of taking title may also mean inheriting existing compliance problems, unresolved registration issues, or conditions already likely to trigger enforcement. 

The registration process itself can also be more burdensome than it first appears. The ordinance may require the owner to provide contact information, the property address, the date the property became vacant, the expected length of vacancy, and the names and addresses of known lienholders or servicing representatives. If the owner is not an Alabama resident, the ordinance may require designation of an in-state agent authorized to receive notices and service of process, or submission to Alabama jurisdiction in a form satisfactory to the program administrator. That is especially significant for out-of-state investors, lenders, and institutional buyers managing Birmingham properties from elsewhere. 

Legal and Practical Risks for Foreclosure Purchasers

One of the biggest legal risks created by HB 315 is successor liability at the property level. Because the bill requires foreclosure buyers and other good-faith subsequent purchasers to assume the obligations of prior owners, a new owner may inherit a troubled asset that is already on the city’s radar. If the prior owner let the property sit vacant and deteriorate, the foreclosure purchaser may have to solve that problem immediately, even though they did not create it.

A second major risk is missing the vacant-property registration deadline. Although foreclosure purchasers receive a longer 90-day period, many acquired properties will already satisfy the statute’s vacancy standard because the 90-day vacancy period can run before the foreclosure sale ever occurs. A buyer that waits too long to inspect, evaluate, and triage the property may lose valuable time and fall behind on registration obligations almost as soon as title transfers.

HB 315 also creates a direct carrying cost risk through registration fees. The statute authorizes an initial annual registration fee of up to $250, with subsequent annual fees allowed to increase by as much as 150% of the previous year’s fee, capped at $1,000. The penalties may be even more serious than the fees. The law allows municipal fines of up to $1,000 per violation for failing to comply with ordinance requirements. Unpaid registration fees and fines may become liens on the property once a notice of lien is recorded in probate. In addition, if the owner does not secure or maintain the property after notice, the municipality may take corrective action and charge the owner its reasonable costs, and those costs may also become liens if properly recorded. That creates a compounding risk: registration fees, violation fines, municipal abatement costs, and title complications can all stack on top of each other.

Out-of-state purchasers face an added compliance challenge. If ownership is held through a remote investment vehicle, loan servicer, or special-purpose entity, the owner will need reliable systems for receiving certified mail, monitoring local conditions, and responding quickly to notices. Otherwise, a missed notice can become a missed deadline, then a fine, and, eventually, a lien. For larger foreclosure operators, HB 315 turns local asset management into a legal compliance function, not just a property-preservation issue.

The statute does contain a modest protection for new buyers. Any lien created under the act is subordinate to prior mortgages, mechanic’s and materialman’s liens, and certain tax-related liens, and the municipality may release liens or waive accrued fees or fines when a vacant property is transferred to a good-faith purchaser. Even so, a foreclosure purchaser should not assume that relief is automatic. Due diligence will still matter, including checking recorded liens and engaging the city early if the property is already distressed. 

Exemptions and Opportunities to Reduce Exposure

For non-government foreclosure purchasers, one useful exemption will likely be the one available when the owner files a statement of plans for restoring the property to productive use and occupancy during the 12 months after initial registration would otherwise be due. If the owner fails to begin restoration or occupancy by the end of that period, the waived fee may come due, but the administrator may extend the waiver for one more year if conditions outside the owner’s control significantly impeded progress. 

That means the law rewards active repositioning and punishes drift. A foreclosure buyer with a real rehab plan, listing strategy, or leasing effort may be able to reduce exposure. A buyer who acquires title but delays action may end up paying recurring fees and defending against enforcement without ever improving the property’s value.

Notice, Appeals, and Enforcement

HB 315 requires the ordinance to provide owners with prior notice and appeal rights. Before an adverse decision, certified-mail notice must be sent to the registered owner at least 10 days in advance using the address maintained in probate office records or tax records, if different. Appeals of violations or fines go to the applicable division of the municipal court, and a further appeal may be taken to circuit court within 30 days. The law also allows inspections of the interior and exterior upon at least 10 days’ prior notice after registration is effective or required, and at yearly intervals thereafter while the property remains in the registration database.

For foreclosure purchasers, those procedural rights are important, but they only help if the owner has systems in place to use them. Someone must be monitoring title records, receiving notices, documenting the condition of the property, preserving evidence of repairs or marketing efforts, and responding within deadlines. Without that operational discipline, the statutory right to appeal may arrive too late to prevent a costly enforcement problem. 

Practical Takeaways

The safest approach under HB 315 is to treat every newly acquired Birmingham foreclosure as a potential regulated vacant property from the moment title is obtained. If Birmingham adopts a vacant property registration program, buyers should quickly determine whether the building has been unoccupied for 90 consecutive days, whether there is visible evidence of neglect, whether prior obligations may already exist, and whether an exemption based on marketing, renovation, or restoration planning is available.

They should also move quickly to secure and maintain the property, register it on time if required, appoint an Alabama-based agent if ownership is out of state, and create a documented plan for restoration, sale, or occupancy. The central practical lesson of the bill is that Birmingham has the ability to make vacancy expensive and inactivity costly. Foreclosure purchasers can still invest in distressed property, but the law strongly favors owners who act quickly and visibly to return those assets to productive use.

By Jordan D. Beumer, Esq.
Scott & Corley, P.A.*

USFN Member (SC)

The Veterans Affairs (“VA”) published advance notice of proposed rulemaking (“ANPRM”) at 87 FR 62752[1] for “Loan Guaranty: Loss Mitigation Options for Guaranteed Loans” in October 2022. This proposed rule was published in the Federal Register.

The purpose of ANPRM is to gather important input from the public, stakeholders, and interested industry parties regarding proposed regulatory changes. This formal process allows agencies to consider various perspectives, insight, and data before finalizing upcoming rules. The feedback provided through ANPRM can influence the development of proposed regulations and rules, ensuring they are well-informed and achieve the intended outcome.

This rule was an effort by the VA to explore the possibility of changes to their incentivized loss mitigation options to further assist veterans, who have VA-backed loans, to retain their homes. The VA had anticipated incorporating responses from the ANPRM into the proposed rule, thereby amending the VA's loss-mitigation regulations to include some of the feedback received.

The proposed rule had received numerous public comments,[2] some noting concerns regarding the efficacy of the proposed rule. One such public comment stated, “The average interest rate for VA-guaranteed loans originated after 2019 is 3%, which is less than half the current market rate. Because VA ties its foreclosure relief options to the market interest rate, the dramatic difference between the market rate and the note on existing loans significantly reduces the effectiveness of the available loss mitigation options.”

On January 21, 2026, the VA announced the withdrawal of the above cited proposed rule on loss mitigation options for guaranteed loans.[3] The VA stated this decision was made due to ongoing assessments of agency “needs, priorities, and objectives.” The VA went on to state that it “appreciates the public comments submitted and continues to consider the best means of addressing some or all of the issues covered in the ANPRM. If, in the future, [the] VA decides it is appropriate to issue regulations on this topic, [the] VA will do so through a new notice of proposed rulemaking, subject to the requirements of the Administrative Procedure Act, 5 U.S.C. 551, et seq.”[4]

Additionally, and as a reminder, on July 30, 2025, President Trump signed the VA Home Loan Program Reform Act.[5] This Act established a partial claim program that, by design, provided federal assistance to veterans struggling to make their mortgage payments. This program replaced the Veterans Affairs Servicing Program (“VASP”) as a “last-resort option” for qualifying borrowers. It was specifically designed to aid delinquent borrowers in avoiding foreclosure by lowering their mortgage rate and thereby making their monthly payments more affordable.[6]

Copyright © USFN 2026
USFNews - Feb.25

Scott & Corley, P.A. (USFN Member – SC) was recognized again in the Tier 1 Metropolitan Rankings for the area of "Mortgage Banking Foreclosure Law" in the 2026 edition of U.S. News – Best Lawyers^®. The Firm was also recognized for the areas of "Financial Services Regulation Law," "Government Relations Practice," and "Litigation – Real Estate." Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal experience.

Additionally, Firm President and Managing Attorney Reggie Corley was recognized in the practice areas of Mortgage Banking Foreclosure Law and Financial Services Regulation Law; and Firm Chair Ron Scott was recognized in Mortgage Banking Foreclosure Law, Litigation – Real Estate, and Government Relations Practice.

By Kelly Cosentino, Esq.

Gross Polowy LLC

USFN Member (NJ, NY, PA)

USFN hosted a webinar in December which explored how leaders react to the ever-changing default mortgage servicing landscape. This USFNgage session, titled Leading Servicing & Legal Teams Through Change: Building Resilient Leadership that Inspires and Perseveres, highlighted how industry leaders are navigating the complexities of the current environment, building leadership pipelines, shaping inclusive and agile team cultures, and preparing their organizations for what lies ahead in 2026.

The discussion was moderated by Christianna Kersey of Cohn, Goldberg & Deutsch, LLC and featured a panel of distinguished industry leaders.

The webinar began with an overview and opening remarks from Kersey. Attendees were then divided into four breakout rooms with each group concentrated on a different topic.

Following 30 minutes of group discussion in the breakout rooms, participants reconvened for a panel-led summary of key insights and takeaways from the respective sessions.

Attracting Talent and Promoting Pathways

Andrew Brenner of BWW Law Group led a discussion on how companies can attract strong talent as well as promote pathways to leadership. This conversation focused on the challenge of bringing in employees that have the skills and experience to do the work but also possess the traits and attributes needed to thrive in their role. Emphasis was also given to identifying high performers and ensuring they are given plenty of challenges but are not overwhelmed to the point of burnout or driven to look elsewhere for another job.

This session also addressed the importance of providing a leadership path for those strong performers. Often, the ability to do the day-to-day work does not translate into a leadership position and can even present a roadblock to advancing career growth. Most contributors in this session agreed that it can take a long time to advance a new group of leaders. It was noted that prioritizing development early in an employee’s career can provide the most advantageous growth path for both the employee and the company.

Evaluating Talent & Providing Effective Feedback

Alicia Byrd of AMIP Management tackled the challenges presented by remote or hybrid environments where alternative methods of communication may be less effective than in-person feedback.  During her session, Byrd’s group discussed the significance of providing meaningful feedback on a consistent basis and ensuring performance evaluations were done based on effective, measurable metrics of success across all teams.

Communicating, Influencing & Change Leadership

Victoria Vickrey of JP Morgan Chase oversaw a discussion on identifying and building future leaders. This included working to ensure that those leaders reflect and respect their team’s needs, vision, and responsibilities. They also referenced the ever-changing dynamic of effective team engagement, with emphasis on strong leadership and inclusive communication. This session highlighted the value of good leadership in establishing effective workplaces.

Mentoring, Coaching & Building Leadership Depth

Finally, Carrie Anne Deal of McCabe, summarized her group’s discussion on mentoring, coaching, and leadership development noting common themes that emerged across the group.

Many experienced a shift away from older, more formal training models in favor of approaches that feel more practical and integrated into daily work. Some examples are shadowing, hands-on coaching, and intentional conversations when someone steps into a new leadership role. Participants shared that using tools like the DISC personality assessment or similar models are only impactful if the organization commits to using the results long term. Otherwise, people tend to forget the insights shortly after the session.

Several suggestions were given on the topic of fostering inclusive leadership. These included using intentional mentor/mentee pairings, considering differences in personality and background, along with respecting communication preferences.

The overall message was clear. Mentoring and leadership development only succeed when they are done intentionally, supported by leadership, built into the workday, and paired with meaningful goals.

The collective insights from the breakout sessions underscored how important it is for everyone to invest in the next generation of leaders in our companies and provided meaningful tools and strategies to achieve this goal.

USFN will be kicking off its 2026 USFNgage series soon exploring topics such as Women in Servicing, Managing Risk, Technology, and Hot Topics of the Industry. Stay tuned for more information on these sessions coming soon, or visit https://www.usfnevents.org/usfngage.html for more information as it becomes available.

Copyright © USFN 2026

USFNews - February 4