If your mortgage is insured by the Federal Housing Administration (FHA) and you're struggling to keep your home, there's some good news that the FHA recently announced.
The FHA, which is part of the Department of Housing and Urban Development (HUD), announced “new procedures to strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes.”
FHA is accomplishing this by “streamlining its loss mitigation protocols that servicers must use when evaluating and deploying 'home retention options,' foreclosure alternatives that allow delinquent borrowers to retain their home.”
The FHA's revised procedures are intended to simplify the process that mortgage loan servicers use to evaluate borrowers for an FHA Home Affordable Modification Program (FHA HAMP).
“These changes will reduce the number of steps that a servicer and borrower must take to resolve a delinquency and enter into a loss mitigation home retention product. In addition, FHA is removing certain obstacles that will allow servicers greater flexibility for evaluating an unemployed borrower for a special forbearance agreement.”
The changes include the following, taken from the FHA's press release:
- Require servicers to convert successful 3-month trial modifications into permanent modifications within 60 days instead of the average four-to-six months;
- Allow borrowers with three missed mortgage payments to qualify for a partial claim to bring their arrearages current versus the previous requirement for a minimum of four missed payments;
- End the traditional stand-alone Loan Modification option so struggling borrowers can access the FHA-HAMP option, with its greater payment relief, sooner; and
- Eliminate the required 12-month term for FHA’s special forbearance option. This will allow servicers to offer this option to more unemployed households.