FHA Revises Loss Mitigation Policies for Borrowers in Disaster Areas
The Federal Housing Administration (FHA) published Mortgagee Letter 2018-01 revising Loss Mitigation relief options for eligible borrowers located in various Presidentially-Declared Major Disaster Areas (PDMDAs) related to Hurricanes Harvey, Irma, and Maria, and certain California Wildfires, Flooding, Mudflows, and Debris Flows.
For your convenience, an overview of these changes include:
- Streamlined income documentation and other requirements, such as an elimination of the trial payment plan requirement, to expedite loss mitigation relief for affected borrowers;
- New “Disaster Standalone Partial Claim” option to aid eligible borrowers on forbearance plans resume their pre-disaster mortgage payments and avoid payment shock
The FHA Handbook will not be updated to reflect these changes, as they are short-term, and applicable to specific disasters.
Mortgagees may immediately implement these relief options but will be required to do so no later than May 1, 2018. The administration reiterated these provisions are no longer to be offered to borrowers on or after May 1, 2019.
FHA has scheduled an industry briefing call for FHA-approved servicers, during which, experts will discuss these changes in depth.
Date: Thursday, March 1, 2018
Time: 11:30 AM – 12:30 PM (Eastern)
Access Code: 445331
As your business partner, PFI would like to ensure that you remain compliant.
Please review FHA’s Mortgage Letter by following this link: https://www.hud.gov/sites/dfiles/OCHCO/documents/18-01ml.pdf