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.

The Federal Housing Administration announced on Tuesday that it is proposing revisions to Single Family servicing policies. These revisions should speed up homeowner assistance and reduce the cost of servicing. The proposed revisions would remove unnecessary barriers for homeowners seeking mortgage payment relief. It would also reduce burdens on the industry that stem from the servicing of an FHA-insured mortgage portfolio. The proposal was published on the FHA’s Single Family Housing Draft Table and is titled: SF Handbook Servicing and Loss Mitigation Section.

“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 foreclosure and eviction moratorium for Single Family homeowners has been extended until August 31st! Read more about it here: Foreclosure and Eviction Moratorium Extended for Single Family Homeowners

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