InfoBytes Blog
FHA reminds servicers of HAF disclosure obligations
On March 24, FHA reminded servicers about their obligation to inform distressed homeowners about the availability of financial assistance for FHA-insured mortgages, including single-family forward mortgages and home equity conversion mortgages (HECM), through the Homeowner Assistance Fund (HAF). HAF was established in 2021 to provide financial support to eligible homeowners who suffered financial hardship during Covid-19. HAF funds may be used to bring a mortgage current or be used in combination with certain available FHA-loss mitigation options for single family forward mortgages or with the Covid-19 HECM Property Charge Repayment Plan. HAF funds also may be used to reduce the balance or pay off a borrower’s outstanding loss mitigation partial claim, even if a borrower’s mortgage payments are now current. Additionally, as permitted, HAF funds may be used to pay for delinquent property tax and homeowners insurance charges on defaulted HECMs. FHA noted in its announcement that the definition of “imminent default” also has been expanded to include homeowners who qualify for HAF. Consequently, “servicers will be able to offer additional loss mitigation options to borrowers who qualified for or used HAF funds and may no longer technically be delinquent but require further assistance to avoid redefault,” FHA explained.