FHA Issues Notice on Two New Policies

The FHA released two notices to mortgagees and servicers on Friday regarding new policies in effect. Safeguard Properties posted the announcement on their ""website"":http://safeguardproperties.com/News_and_Events/All_Client_Alerts/2012/03/FHA_Notices_and_Reminders.aspx?ID=%7B1A2F5720-7C13-415E-A0EC-96B3EFE2D82E%7D.

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The first reminder is on escrow funds/payoff statements and states that escrow funds should not be used for outside purposes.

The notice on Safeguard’s site explains as follows:

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""To date, the Secretary has not authorized the use of escrow funds for purposes other than those stated in the regulation. Therefore, reduction of loan principal is not an eligible purpose for the use of escrow funds. Lenders or Mortgagees with an existing loan shall not apply escrow funds to reduce the outstanding loan balance in the payoff amount. Escrow funds are the borrowers’ funds collected at loan closing and paid monthly thereafter for the purposes permitted in the cited regulation. A lender or mortgagee holding escrow funds shall reimburse the borrower the full amount held in escrow no later than 30 days after the existing loan is paid off.""

The Code of Federal Regulations can be found ""online"":http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR.

HUD has also developed a grass cut pricing schedule for the 2012 grass cutting season. Details and prices for the schedule, along with other property requirements, can be found ""online"":http://portal.hud.gov/hudportal/documents/huddoc?id=ML1018FAQ.pdf.

Safeguard Properties is a privately held field services company based in Cleveland, Ohio. Safeguard is supported by a nationwide network of subcontractors able to perform requested superintendence, preservation, maintenance functions, and other services in the U.S., the Virgin Islands, and Puerto Rico.