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FHA Proposes Revisions to Single-Family Servicing Policies

home prices

The Federal Housing Administration (FHA) published proposed revisions to its Single-Family servicing policies that are designed to remove unnecessary barriers for homeowners seeking mortgage relief.

Revisions were posted on its Single-Family Housing Drafting Table. [1]  The Administration will be accepting industry feedback on the proposal for 60 days.

“Our proposed policy changes will strengthen servicers’ ability to keep families experiencing financial challenges in their homes. They reduce the unnecessary barriers that often impede the delivery of timely borrower assistance,” said Acting Federal Housing Commissioner Len Wolfson.

The FHA’s revisions include:

“The proposal we posted today is part of FHA’s work to update its end-to-end servicing policies to promote efficiency while managing risk to FHA’s Mutual Mortgage Insurance Fund,” said FHA Deputy Assistant Secretary for Single Family Housing Joe Gormley. “These revisions, if implemented, will address key challenges our business stakeholders, industry groups, and borrowers have communicated to us over the last several years.”

Earlier this month the FHA and the Federal Housing Finance Agency (FHFA) announced additional measures to assist homeowners.

The FHFA announced that the GSEs—Fannie Mae and Freddie Mac—will extend several loan origination flexibilities until August 31.

These flexibilities were set to expire on July 31, 2020.

Extended flexibilities include:

Additionally, the Federal Housing Administration (FHA) announced  [2]several options for homeowners whose COVID-19 forbearance is coming to an end.

FHA clarified that none of its home retention options [3] in the waterfall of solutions require a borrower to submit their missed payments immediately in a lump sum. The administration also clarified that servicers may not charge fees or penalties for any payments missed during a COVID-19-related forbearance.