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.