Modernizing Loss Mitigation for a Digital Era

In a recent Inside Mortgage Finance interview, Sagent Chief Compliance and Customer Success Officer Matt Tully highlighted a growing industry need: updating loss mitigation rules that were built for a very different mortgage environment. 

Today’s Reg X framework — written more than a decade ago — reflects a pre-digital process. But the modern servicing experience has transformed. Homeowners expect faster, more transparent interactions, and servicers now operate with far more advanced digital capabilities. 

Tully pointed to particular friction in how loss mitigation applications are evaluated. Current requirements often mandate that servicers assess every possible option — regardless of homeowner intent — which introduces unnecessary complexity into the process. 

He also emphasized the importance of aligning with established FHA and VA loss mitigation “waterfalls,” which guide servicers through structured, homeowner-specific solutions based on responses and eligibility. Providing greater regulatory deference to these frameworks, he noted, could improve both efficiency and borrower outcomes. 

The takeaway: modern servicing needs modern rules. As digital-first experiences reshape the industry, evolving regulatory frameworks will be key to delivering faster, clearer, and more customer-centric loss mitigation. 
 
Read the full Inside Mortgage Trends article for more on how Sagent and leaders like Matt Tully are shaping the next generation of mortgage servicing.