Effective immediately, mortgage servicers will be able to use an expanded menu of loss-mitigation tools, known as a “waterfall,” to assess homeowners’ eligibility for other options to bring their mortgages current if they do not qualify for FHA’s COVID-19 National Emergency Standalone Partial Claim.
These options are available for homeowners whose mortgages were current or less than 30 days past due as of March 1, 2020.
“Our goal throughout this crisis has been to prevent American homeowners from losing their homes through no fault of their own,” HUD Secretary Ben Carson said in a news release. “Providing more solutions now to save homes in the future is part of the administration’s unprecedented response to the crisis and will contribute to the larger economic recovery already underway.”
FHA’s COVID-19 home retention waterfall for homeowners who occupy their FHA-insured single-family residences now includes requiring servicers to assess homeowners for the following at or before the end of their forbearance period:
“This comprehensive set of measures will help virtually every homeowner who has requested COVID-19 forbearance,” acting FHA Commissioner Len Wolfson said in the release. “It also provides servicers with the tailored and streamlined capabilities they need to provide assistance to homeowners as quickly and as efficiently as possible.”
For borrowers who do not currently occupy their FHA-insured single family property, FHA announced the COVID-19 Non-Occupant Loan Modification, which allows non-occupant borrowers who have received COVID-19 forbearance to obtain a modification to their mortgage rate and term.
None of FHA’s home retention measures require a borrower to make a lump-sum payment at the end of the forbearance period. Additionally, servicers are not permitted to charge fees or penalties for missed mortgage payments while the borrower is in a forbearance period.
Cover Story: