What Is Regulation X?

What Regulation X Protects

Regulation X implements RESPA. Its mortgage-servicing provisions address how servicers handle borrowers' payments, requests and applications for help. Those are procedural rights, not a promise that a borrower will qualify for a particular payment arrangement.

Under § 1024.30, the early-intervention, continuity and loss-mitigation provisions in §§ 1024.39–1024.41 generally concern covered principal-residence mortgages. Reverse-mortgage transactions and loans serviced by qualified lenders under the Farm Credit Act are exempt from §§ 1024.38–1024.41. Qualifying small servicers are exempt from most of those provisions but retain the duties described below. These limitations do not define the scope of every other Regulation X right.

Early Intervention: § 1024.39

For covered principal-residence mortgages subject to § 1024.39(a), the servicer generally must establish or make good-faith efforts to establish live contact no later than the 36th day of delinquency and again no later than 36 days after each payment due date while the borrower remains delinquent. Attempts may include telephone, written or electronic outreach; a recorded message does not itself establish live contact. After live contact, the servicer must discuss the general availability of loss-mitigation options if appropriate. The provision has bankruptcy and debt-collection exceptions; it does not guarantee that a conversation will occur.

For covered principal-residence mortgages subject to § 1024.39(b), the written notice is generally due by day 45, with exceptions and frequency limits: no more than one notice is required during any 180-day period. It must encourage contact, give the assigned-personnel telephone number and mailing address, describe examples of options if applicable, explain how to apply or obtain application information if applicable, and provide housing counselor resources. The provision's bankruptcy and debt-collection exceptions can change the notice duties.

Continuity of Contact: § 1024.40

For covered principal-residence mortgages subject to § 1024.40, servicers must maintain policies and procedures reasonably designed to assign personnel by the required written notice and no later than day 45 of delinquency, make personnel available by telephone, and provide a timely live response when immediate contact is unavailable. Personnel can be a person or a team with single-purpose or multi-purpose duties. They must be able to explain the options available for that loan, application requirements and status, and how to raise servicing errors; § 1024.30 exemptions apply.

Loss Mitigation Procedures: § 1024.41

The First Foreclosure Notice or Filing

On covered principal-residence mortgages, § 1024.41(f)(1) generally bars the first notice or filing required by state foreclosure law unless the loan is more than 120 days delinquent. The rule also permits a first notice or filing for a due-on-sale violation or when the servicer is joining another lienholder's foreclosure. This is not an automatic addition to a state's notice or foreclosure timeline. Loan exemptions apply; qualifying small servicers remain subject to this paragraph.

Application Receipt and Evaluation

When § 1024.41 applies to a covered principal-residence mortgage, § 1024.41(b)(2) generally requires review for completeness and written acknowledgment of a loss-mitigation application received 45 days or more before a foreclosure sale, or when no sale is scheduled. The deadline is five days excluding Saturdays, Sundays and legal public holidays. The acknowledgment states whether the application is complete or incomplete and, if incomplete, identifies missing items and an applicable submission date. The servicer must exercise reasonable diligence to obtain information needed to complete an application.

When § 1024.41 applies to a covered principal-residence mortgage, § 1024.41(c)(1) generally requires evaluation and a written determination within 30 days after receipt of a complete application more than 37 days before sale. The evaluation covers all options available from the owner or assignee for that borrower's loan, not every program in the servicer's portfolio. No particular option or approval is guaranteed. Under the rule's timing provisions, if no sale is scheduled when a complete application arrives, it is treated as received more than 90 days before sale.

For a covered principal-residence mortgage when § 1024.41 applies, under § 1024.41(c)(4), if an otherwise complete application lacks necessary information outside the borrower's control, the servicer must still finish all possible evaluation steps within 30 days and exercise reasonable diligence to obtain the missing information. The specified written notice is due within 30 days of receipt or promptly thereafter. It says that required information outside the borrower's control has not been received, identifies that information, confirms that the servicer requested it, and says the evaluation will be completed promptly after it arrives. The servicer cannot deny solely because it lacks that information until a significant period has passed, it has used reasonable diligence without obtaining it, and the rule's additional inability-to-determine conditions are met. This is not a blanket extension of the evaluation deadline.

Which Foreclosure Actions Must Wait?

When § 1024.41 applies to a covered principal-residence mortgage, § 1024.41(f)(2) protects a complete application submitted during the pre-foreclosure review period or before the first notice or filing: that first notice or filing must wait until one of the conditions below is met. This protection is different from the rule for an application received after foreclosure has begun.

When § 1024.41 applies to a covered principal-residence mortgage, § 1024.41(g) protects a complete application received after the first notice or filing and more than 37 days before sale. The servicer must not move for foreclosure judgment or order of sale or conduct the sale until one of the conditions below is met. Some intermediate steps, including qualifying publication, mediation or arbitration, may continue only if they cannot cause or directly result in the prohibited judgment, order or sale.

These restrictions end only when the servicer gives a written determination that no available option applies and the relevant appeal is not applicable, not requested within the allowed period, or denied; the borrower rejects all offered options; or the borrower fails to perform under a loss-mitigation agreement. An initial denial does not by itself end an applicable appeal protection. An application received 37 days or less before sale does not trigger § 1024.41(g)'s application-based restriction; separate state or investor requirements may still apply.

Denial Reasons and Appeals

When § 1024.41 applies, § 1024.41(d) requires specific reasons for denial of an available trial or permanent loan modification for a covered principal-residence mortgage. This is not a requirement to give those specific denial reasons for every type of loss-mitigation option.

When § 1024.41 applies to a covered principal-residence mortgage, § 1024.41(h) requires an appeal opportunity for denial of an available trial or permanent loan modification if the complete application was received 90 days or more before sale or during the period described in paragraph (f). The borrower must be allowed at least 14 days to request the appeal. Different personnel review it and generally must provide a determination within 30 days. This appeal rule covers those loan-modification decisions, not every denied option.

Section 1024.41(i) limits repeated applications: a servicer that previously complied with the section for a complete application generally need not repeat that compliance if the borrower has remained continuously delinquent since submitting it. A new servicer cannot rely on a different servicer's earlier compliance as though it were its own.

Small Servicers

A servicer qualifies for the small-servicer exemption under the criteria in 12 CFR § 1026.41(e)(4), not its company label alone. For covered principal-residence mortgages, § 1024.41(j) retains § 1024.41(f)(1) and bars the first notice or filing, motions for foreclosure judgment or order of sale, and conducting the sale while the borrower is performing under a loss-mitigation agreement. Most other § 1024.41 duties and the early-intervention and continuity provisions do not apply to qualifying small servicers.

Regulation X and State Foreclosure Laws

State foreclosure procedures and additional borrower rights operate alongside the applicable federal rules. A federal restriction on a filing, judgment or sale is not the same as a prediction of how long a state foreclosure will take. An attorney or housing counselor can help identify the rules and deadlines for a particular mortgage and proceeding.

Enforcement and Violations

Under § 1024.41(a), a borrower may enforce that section through RESPA section 6(f). Recovery of damages or another remedy is not guaranteed; it depends on the applicable law and facts. Keep dated copies of submissions, receipts and correspondence. A CFPB complaint can raise a servicing problem, but filing a complaint does not automatically stop or cancel a foreclosure sale. If a sale is approaching, seek prompt advice from a foreclosure attorney or a HUD-approved housing counselor about the available procedures.