Attorney General Bonta: FHA Must Require Mortgage Agents To Take Positive Action To Help Distressed Homeowners Access Critical Relief | State of California – Department of Justice


OAKLAND – California Attorney General Rob Bonta today, as part of a multi-state coalition, urged the Federal Housing Administration (FHA) to address mortgage agent 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 due to COVID-19, the mortgage manager is required to review the loan to see if it qualifies for the payback modification. FHA’s COVID-19, a loan modification that lowers their monthly payments by extending the term of their mortgage. The FHA has provided this loan modification option to help struggling homeowners, including low-income households, new homeowners, and households of color who have been disproportionately affected by the pandemic. Unfortunately, the coalition has received reports that mortgage agents do not notify homeowners about this option, wrongly denying that this option exists and demanding unnecessary documents or other conditions for this option.

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

Since the onset of COVID-19, the FHA has taken steps to ensure struggling homeowners can stay in their homes. As part of this effort, the FHA has asked managers of FHA insured mortgages to notify eligible homeowners of the COVID-19 recovery modification option starting in October 2021. Unfortunately, the coalition has received reports that many mortgage managers fail to notify eligible homeowners. of the COVID-19 recovery modification and impose unnecessary conditions or provide false information to owners about its availability.

In today’s letter, the coalition urges the FHA to demand that these mortgage agents take positive action to implement the COVID-19 Recovery Modification, including:

  • Positively offer loan modification options available to qualifying arbors;
  • Ensure all communications to borrowers include complete information about their COVID-19 recovery options; and
  • Training of customer service staff to ensure 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 housing complaints or advice to [email protected] Attorney General Bonta has also launched a housing portal on the Department of Justice website with resources and information for California landlords 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 for sending the letter.

A copy of the letter is available here.


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