Late last week, the Federal Housing Administration (FHA) issued a series of updated, servicing-related guidance for Title II forward mortgages as well as Home Equity Conversion Mortgages.
On Friday, FHA published Mortgagee Letter 16-02: Update of Preservation and Protection Requirements and Cost Reimbursement for Title II Forward Mortgages and HECMs.
The new guidelines update the property preservation and protection (P&P) guidance related to properties securing FHA-insured mortgages and increases the Maximum Property Preservation Allowance; adds, clarifies and increases specific property repair line items; emphasizes FHA’s current conveyance condition standard; reminds mortgagees of FHA’s inspection requirements; and provides information on the claim’s calculation and documentation requirements for property P&P actions.
Effective on February 1, 2016, the policies set forth in ML 16-02 modify or supersede where there is conflict, Mortgagee Letter 10-18 and its exhibits.
Also on Friday, FHA published Mortgagee Letter 16-03: Single Family Foreclosure Policy and Procedural Changes for HUD Title II Forward Mortgages and Reverse Mortgages. ML 16-03 updates HUD’s Reasonable Diligence timeframes in 32 jurisdictions and provides guidance on judicial foreclosures of FHA-insured home loans in the District of Columbia.
Additionally, HUD also released Mortgagee Letter 2016-04, which provides guidances on automatic extensions to HUD’s initiation of foreclosure timelines. These updated policies supersede ML 15-21 in its entirety and provides guidance relating to HUD’s regulatory requirement for mortgagees to utilize a loss mitigation option or initiate foreclosure within six months of the date of default.
View HUD’s new Mortgagee Letters here.
Written by Jason Oliva