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:
You can read the FHA's press release here and view the full letter here.