AWACSMortgage compliance intelligence from Flightline

FHLB Chicago MPF · Announcement MPF Announcement 2026-34 · Published

MPF Traditional Servicing Updates for Forbearance, Modifications, and Foreclosure

Servicers must adopt updated loss mitigation policies by September 1, 2026, including an approval requirement for disaster-related foreclosure actions and three-month forbearance increments. The update also clarifies that past modifications and post-evaluation delinquency payments do not disqualify disaster-impacted borrowers from loan modifications.

Action requiredEffective Sep 1, 2026 · may adopt nowAll checks passedRead the announcement ↗ (opens in a new tab)

Loan impact

Summarized from the announcement · verified

Applies to: Mortgages serviced under the MPF Traditional program undergoing forbearance, disaster loan modifications, or foreclosure actions.

Addressed to
MPF participating financial institutions (PFIs)From the publisher, not quoted from the text
Investor
MpfFrom the publisher, not quoted from the text
Affected areas
Foreclosure; Loss mitigationGuide Section 8.5.4
Effective
Sep 1, 2026Sellers may implement immediately
Applicability confidence
Verified: every row taken from the source text is supported by it; rows marked "from the publisher" are not quoted

Summary by AWACS. FHLB Chicago MPF's guide is proprietary, so AWACS does not reproduce its text. Read the official announcement ↗ (opens in a new tab)

What changed

Summarized from the announcement · Sections 8.5.4, 9.2.1, 9.2.4.4.2
RequirementPreviouslyNow
Foreclosure approval requirement for disaster areasNewRequiredSection 8.5.4Not statedServicers must follow new rules when initiating or pausing foreclosure for disaster properties, including securing required approval.
Forbearance plan term incrementsChangedRequiredSection 9.2.1Not statedAllowable forbearance plan durations are adjusted to three-month increments.
Disaster modification eligibility rulesRelaxedSection 9.2.4.4.2Not statedBorrowers with disaster hardships remain eligible for modifications regardless of prior modifications or subsequent payments reducing delinquency.

What to do

AWACS interpretation · not source language

What to review: Review the mandatory loss mitigation updates effective September 1, 2026, focusing on approval requirements for disaster-related foreclosures and three-month forbearance increments before considering the relaxed modification eligibility criteria.

Servicing

Implement required loss mitigation procedures by September 1, 2026, by securing necessary approvals when initiating or pausing foreclosures on disaster properties and setting forbearance plan durations in three-month increments.

QC implications

  • Sample disaster-affected accounts facing foreclosure initiation or suspension to verify that required approvals were secured.
  • Audit forbearance plans to confirm allowable durations align with three-month increments.
  • Verify that disaster-impacted borrowers are not improperly disqualified from modification eligibility due to prior modifications or subsequent payments reducing delinquency.

Source and record

Version 1 · archived

Checks

  • Source verified: Passed

    The document ID, link and publication date match the official source.

  • Quotes match the source: Passed

    Every quoted passage appears word for word in the official document.

  • Requirements backed by the source: Passed

    Anything marked required is backed by the requirement language and dates in the source.

  • In scope: Passed

    The document is about residential mortgage lending.

  • Format and labels: Passed

    The record follows the AWACS format and uses its standard labels.