FHA proposes Streamlined Single Family Servicing Policies
Posted On: July 16, 2020
The FHA proposes changes in order to streamline Single Family servicing policies. The changes will focus on expediting homeowner assistance and making operations more efficient in order to reduce the cost of servicing.
“Our proposed policy changes will strengthen servicers’ ability to keep families [who are] experiencing financial challenges in their homes. They reduce the unnecessary barriers that often impede the delivery of timely borrower assistance.” – Acting Federal Housing Commissioner, Len Wolfson
The FHA’s proposed revisions specifically focus on:
Revising the standard servicing loss mitigation home retention waterfall. This is to ensure borrowers are assessed for the solution that is most likely to best help them avoid foreclosure;
Eliminating unnecessary and time-consuming borrower documentation requirements. This is for Trial Payment Plans, bringing FHA requirements into alignment with industry best practices and allowing servicers to grant assistance more quickly.
Modifying other servicing and operational policies. This includes the allowable fee structures that provide more consistency between FHA policies and those used by the private market and the Government Sponsored Enterprises. (hud.gov)
“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… These revisions, if implemented, will address key challenges our business stakeholders, industry groups, and borrowers have communicated to us over the last several years.” – FHA Deputy Assistant Secretary for Single Family Housing, Joe Gormley
The FHA will be accepting feedback on these potential changes for the next 60 days. For clarification, these proposed revisions are, indeed, proposals. They are “NOT effective policy, and do NOT impact FHA’s special COVID-19 home retention options.” (hud.gov)
The U.S. Department of Housing and Urban Development (HUD) released Notice H 2020-11 detailing the continued availability of funds for COVID-19 Supplemental Payments for PBRA properties under Section 8, 202, or Section 811 Programs.