What must a credit union do when a borrower appeals a denial of loss mitigation?

When a borrower appeals a denial of loss mitigation, it is essential for the credit union to review the appeal by a different staff member. This process ensures an unbiased and fair evaluation of the appeal, as it helps to eliminate any potential conflicts of interest or preconceived notions that the original reviewer may have had. This practice not only upholds the integrity of the appeals process but also enhances the borrower's trust in the institution's commitment to fair treatment.

The importance of having a different staff member conduct the review lies in the potential impact of the denial on the borrower's situation. By ensuring a fresh perspective on the appeal, the credit union can better assess the circumstances and make an informed decision, which may lead to a more favorable outcome for the borrower. This approach promotes accountability within the organization and aligns with best practices in lending and loss mitigation processes.