FHA expansion of its loss mitigation options.

 

The Federal Housing Administration announced expansion of its loss mitigation options used to help borrowers struggling to make mortgage payments on their FHA-insured mortgages. The enhancements announced in Mortgagee Letter 2023-02 extends FHA’s COVID-19 loss mitigation options to all eligible borrowers who fall behind on their mortgage payments, regardless of the cause of their delinquency. The updates also enable mortgage servicers to use the full 30 percent of FHA’s partial claim option, rather than the previously permitted 25 percent, to help maximize the number of borrowers able to retain their homes.  The mandatory effective date of the changes is April 30, but FHA said mortgage servicers can begin offering these options to borrowers immediately. “We are committed to ensuring that no FHA borrower experiences foreclosure unnecessarily,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “FHA’s COVID-19 forbearances and streamlined COVID-19 loss mitigation options have successfully helped millions of struggling borrowers in the last two fiscal years alone. Our action lets us capitalize on what we have learned through the pandemic to continue helping borrowers avoid foreclosure, regardless of the nature of their hardship.”

Source: FHA