FHA proposes revisions to single family servicing policies

Federal Issues HUD FHA GSE Mortgages Mortgage Servicing Loss Mitigation

On July 14, FHA published proposed revisions to the Servicing and Loss Mitigation section (Section III) of the Single Family Housing Policy Handbook 4000.1 (SF Handbook) on the agency’s drafting table. The proposed revisions include: (i) changes to the standard servicing loss mitigation home retention waterfall; (ii) elimination of certain borrower documentation requirements for Trial Payment Plans to be consistent with industry practices; and (iii) modification of certain operational policies to provide more consistency between FHA policies and those used by Government Sponsored Enterprises and the private market. The proposed revisions do not address the immediate servicing and loss mitigation challenges created by the Covid-19 pandemic. Comments on the proposed revisions must be received by September 12.