FHA reinstates HAMP loss mitigation for exempted transfers

Agency Rule-Making & Guidance Federal Issues HUD Mortgages Loss Mitigation Consumer Finance FHA Covid-19

HUD recently released Mortgage Letter (ML) 2023-11 to update previously issued guidance on loss mitigation options for non-borrowers who acquire a title through an exempted transfer. The provisions apply to all FHA Title II Single Family forward mortgage programs and may be implemented immediately but no later than July 21. Previously, ML 2023-03 (which expanded Covid-19 recovery loss mitigation options) temporarily suspended the use of FHA Home Affordable Modification Program (HAMP) loss mitigation for all borrowers. As a result, mortgagees were no longer able to review non-borrowers who acquired a title through an exempted transfer for FHA-HAMP loss mitigation. With the issuance of ML 2023-11, FHA has reinstated FHA-HAMP loss mitigation to allow mortgagees to review non-borrowers who acquired a title through an exempted transfer and are in default or imminent default.