The Federal Housing Administration (FHA) announced updates to its single-family home handbook on Monday aimed at strengthening harm reduction approaches for weak borrowers while streamlining servicer needs.
“The To update The FHA Maintenance and Loss Mitigation section of the FHA Single Family Home Policy Handbook streamlines many standard operational requirements for mortgage servicers, including revising the FHA Damage Mitigation Waterfall to allow servicers to provide more effective harm reduction options to borrowers at risk Losing homes through foreclosure, “FHA stated in a press release.
Additional changes streamline and improve many service requirements to better align with industry practices and reduce barriers to servicing FHA-insured single-family mortgages, FHA said.
“With these updates, we have strengthened servicers’ ability to reach and assist faster borrowers with FHA-insured mortgages,” said Assistant Senior Secretary for Housing Lopa Kolluri. “The updates to our policy will ensure quality service activity.” Optimize service requirements, align our service policies more closely with industry maintenance practices, and improve results. “
According to the FHA, the policy changes described – based on rigorous internal analysis and extensive public feedback – will improve the effectiveness and efficiency of FHA’s service policies. The changes announced today also complement the FTA Actions earlier this year To provide urgent and immediate assistance to the country’s homeowners struggling to make their mortgage payments due to COVID-19.
- A redesigned harm reduction waterfall that allows servicers to screen borrowers in difficulty for a permanent FHA-HAMP (Home Affordable Modification Program) option that has proven extremely effective at helping borrowers relapse and avoid long-term indulgence Avoid foreclosures.
- Optimized documentation requirements to avoid unnecessary delays and better align with industry maintenance practices, including removing the signature requirements for test payment plans; and
- A revised structure for certain allowable costs and fees, in line with the fee structures used by other industry participants.
“The work completed today is in response to feedback we have received about the complexity and cost of servicing FHA-insured mortgages,” said Julie Shaffer, assistant assistant secretary for single family homes. “The FHA requirements will continue to reflect our high expectations of servicers. Updating our processes and addressing obsolete and unnecessary requirements will improve the program for both borrowers and servicers.”
FHA-insured borrowers should visit FHAs COVID-19 resources for homeowners Website on FHA.gov. Other borrowers are encouraged to visit the consumer financial protection office Coronavirus mortgage and housing assistance Web pages.