FHA Info Messages 2020-2021

FHA INFO 2021-114 - New Effective Dates for Transition to FHA Catalyst: Single Family Default Monitoring System (SFDMS) Reporting Module

December 30, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 21-31, Update to FHA Catalyst Transition for Single Family Default Monitoring System (SFDMS) Reporting Module.

This ML revises the effective dates for the transition to the FHA Catalyst: SFDMS Reporting Module and the associated changes to the SFDMS Reporting Codes and Reporting Data Elements.

Mortgagees should note the revised dates below:

• February 7, 2022: The last day that mortgagees will be able to process default reporting through FHA Connection (FHAC).
• March 1, 2022: Mortgagees will be required to submit default data in the FHA Catalyst: SFDMS Reporting Module or through the Electronic Data Interchange (EDI).

Additionally, the effective date for the updated default reporting codes has changed to March 1, 2022. Mortgagees should reference the updated SFDMS Reporting Codes and Data Elements document available on the Handbook 4000.1 Supplemental Documents page.

The revised dates will be incorporated in a future version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2021-113 - Extension of Review and Feedback Period for Draft Home Equity Conversion Mortgage Sections of Single Family Housing Policy Handbook 4000.1 

December 29, 2021 - Today, the Federal Housing Administration (FHA) is extending the deadline for review and feedback on the draft Home Equity Conversion Mortgage (HECM) sections of its Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). Interested stakeholders are encouraged to thoroughly review and provide feedback on the sections through the new deadline, which is January 31, 2022.

The draft HECM sections of Handbook 4000.1 posted for feedback on the Single Family Housing Drafting Table (Drafting Table) and was announced in FHA INFO 21-81 on September 29, 2021.

Instructions for providing feedback are posted on the Drafting Table. FHA will carefully consider all feedback received.

FHA INFO 2021-105 - Further Extension to Temporary Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers

December 2, 2021 - Today, the Federal Housing Administration (FHA) published extensions to its temporary regulatory and Single Family Housing Policy Handbook 4000.1 waivers allowing mortgagees to utilize alternative methods for conducting face-to-face interviews with borrowers as part of the early default intervention requirements of FHA default servicing. These alternatives provide practical and useful methods for conducting face-to-face interviews with borrowers. The waivers are effective through December 31, 2022.

FHA first published temporary partial waivers of these requirements on March 13, 2020, in response to the ongoing public health concerns due to the COVID-19 pandemic. FHA published an extension of the waivers on February 2, 2021.

FHA INFO 2021-103 - Delay of Implementation of Mortgagee Letter 2021-21, FHA Catalyst: Single Family Default Monitoring System (SFDMS) Reporting Module, and associated changes to the Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Data Elements (ML 21-30)

December 1, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-30, Delay of Implementation of Mortgagee Letter 2021-21, FHA Catalyst: Single Family Default Monitoring System (SFDMS) Reporting Module, and associated changes to the Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Data Elements.

This ML announces the postponement of the effective dates for the FHA Catalyst: SFDMS Reporting Module, which will transition the SFDMS reporting of delinquent FHA Title II Single Family forward mortgages in FHA Connection (FHAC) to the FHA Catalyst platform. The transition was announced in Mortgagee Letter (ML) 2021-21 on September 13, 2021, along with associated changes to the Single Family Default Monitoring System (SFDMS) Reporting Codes and Reporting Data Elements.

Due to the implementation delay, the current SFDMS reporting system in FHAC will remain available until the transition begins in 2022. Additionally, mortgagees that submitted the FHA Catalyst: User Access Request Form to obtain access to the FHA Catalyst: SFDMS Module in advance do not need to resubmit the form. 

An ML will be published at least 60 days prior to the new effective date for the transition to the FHA Catalyst: SFDMS Reporting Module and the associated changes to SFDMS Reporting Codes and Reporting Data Elements. At that time, FHA will also provide updated onboarding information.

FHA INFO 2021-102 - 2022 Nationwide Forward Mortgage Limits (ML 21-28); 2022 Nationwide Home Equity Conversion Mortgage (HECM) Limits (ML 21-29)

November 30, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2021-28, 2022 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2022, through December 31, 2022.

FHA’s “floor” and “ceiling” loan limits will increase from $356,362 and $822,375 in Calendar Year (CY) 2021, to $420,680 and $970,800[1] in CY 2022, respectively, for a one-unit property.

The following table lists the CY 2022 FHA loan limit thresholds for low-cost and high-cost areas:

Mortgagees may view the list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” — along with lists that can be sorted by state, county or Metropolitan Statistical Area (MSA), or by calendar year — on the Maximum Mortgage Limits web page. CY 2022 loan limits for FHA-insured Title II forward mortgages will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

[1]Alaska, Hawaii, Guam and the U.S. Virgin Islands are subject to a higher “ceiling.” See Mortgagee Letter for details.

2022 Nationwide Home Equity Conversion Mortgage Limits

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2021-29, 2022 Nationwide Home Equity Conversion Mortgage (HECM) Limits, which provides the Calendar Year (CY) 2022 maximum claim amount for FHA-insured traditional HECM, HECM for purchase, and HECM-to-HECM refinances. Read today’s Press Release.

The maximum claim amount for FHA-insured HECMs for all areas, including Alaska, Hawaii, Guam, and the U.S. Virgin Islands, in CY 2022, will be $970,800; 150 percent of the Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit of $647,200. This limit is applicable for case numbers assigned on or after January 1, 2022, through December 31, 2022.

The maximum CY 2022 claim amount for FHA-insured HECMs will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

FHA INFO 2021-99 - Federal Housing Administration (FHA) Annual Report to Congress

November 15, 2021 - Today, the Department of Housing and Urban Development (HUD) released its Federal Housing Administration (FHA) Annual Report to Congress on the financial status of FHA’s Mutual Mortgage Insurance Fund (MMI Fund) for fiscal year (FY) 2021. As detailed in the report:

• The percentage of first-time homebuyers using FHA insurance reached a new high of 84.73 percent of total FHA forward mortgage purchase endorsements in FY 2021.
• The share of mortgages insured by FHA to borrowers of color reached more than 42 percent of all FHA forward mortgage insurance endorsements in FY 2021.
• The MMI Fund overall Capital Ratio for FY 2021 was 8.03 percent, an increase of 1.93 percentage points from FY 2020’s 6.10 percent.
• FHA had insurance-in-force on single family mortgages with an unpaid principal balance of $1.2 trillion at the end of the fiscal year.
• The performance of the forward book of business posted a stand-alone capital ratio of 7.99 percent, increasing by 1.68 percentage points from FY 2020’s 6.31 percent.
• The Home Equity Conversion Mortgage (HECM) portfolio stand-alone capital ratio improved to positive (+) 6.08 percent in FY 2021 from negative (-) 0.78 percent in FY 2020.

FHA INFO 2021-97 - Title I Property Improvement, and Manufactured Home Loan Programs sections of Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) Published

November 9, 2021 - Today, the Federal Housing Administration (FHA) announced the publication of the Title I Property Improvement, and Manufactured Home Loan Programs sections of its Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). These sections are the latest to be added to Handbook 4000.1, which improves the overall effectiveness and efficiency of FHA’s Title I Program polices and processes. 

The Title I Manufactured Home Loan program is meant to facilitate financing for manufactured homes that are titled as personal property, and the lots on which these homes will reside. The Title I Property Improvement Loan program is designed to help homeowners finance improvements on their homes to improve the livability or utility of a property through a second trust or unsecured loan.

The Title I sections of Handbook 4000.1 will provide FHA’s Title I lenders, appraisers, and other stakeholders with a comprehensive policy resource. Additionally, the sections replace the existing guidance for Title I Manufactured Home Loans, including Lot and Combination Loans, and Property Improvement Loans in:

• Section II, Origination through Post-Closing/Endorsement;
• Section III, Servicing and Loss Mitigation; and
• Section IV, Claims and Disposition.

Section I, Doing Business with FHA, and Section V, Quality Control, Oversight and Compliance, were largely previously completed and incorporated into Handbook 4000.1 for both Manufactured Home Loans and Property Improvement Loans.

The Title I sections consolidate existing guidance found in approximately 120 Title I Lender Letters and other policy documents into a single source and incorporate updates to guidance for clarity. These Title I sections also provide changes such as alignment of employment and income requirements with FHA’s Title II mortgage insurance programs, expanded appraisal options, and updates to financeable fees and charges. This publication is a continuation of FHA’s progress toward a consolidated, authoritative Handbook 4000.1 that will make it easier to do business with FHA.

These updates do not impact previously announced effective dates for Handbook 4000.1. The following are effective dates for the various Handbook 4000.1 sections:

• All new content may be implemented immediately, but must be implemented by May 9, 2022, except for the new content in Section II: Origination through Post Closing/Endorsement.
• New content in Section II: Origination through Post-Closing/Endorsement may be implemented immediately but must be implemented for loans closed on or after May 9, 2022.

Stakeholders are encouraged to review and familiarize themselves with the Title I sections in Handbook 4000.1 in their entirety.

FHA INFO 2021-94 - Draft Home Equity Conversion Mortgage Sections of Single Family Housing Policy Handbook 4000.1

November 1, 2021 - Today, the Federal Housing Administration (FHA) announces an extension to the review and feedback period for the draft Home Equity Conversion Mortgage (HECM) Origination through Servicing sections of its Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). The draft sections were posted for feedback on the Single Family Housing Drafting Table (Drafting Table) as announced in FHA INFO 21-81 on September 29, 2021.

Stakeholders are encouraged to thoroughly review and provide feedback on the draft sections through its new feedback period end date of December 31, 2021. Instructions for viewing the draft sections and providing feedback are available on the Drafting Table. FHA will carefully consider all feedback received.

FHA INFO 2021-92 - Defect Taxonomy for Servicing Loan Reviews Posted on Single Family Housing Drafting Table for Public Feedback

October 28, 2021 - Today, the Federal Housing Administration (FHA) posted a draft update of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Appendix 8.0 - FHA Defect Taxonomy with a new proposed section for Servicing Loan Reviews. The update is available for public review and feedback on FHA's Office of Single Family Housing "Drafting Table" (Drafting Table).

On April 19, 2021, FHA published an update to the Servicing and Loss Mitigation section of Handbook 4000.1, which strengthened FHA's loss mitigation approaches for struggling borrowers while streamlining key requirements for servicers. The proposed Defect Taxonomy updates will build on these policy changes by providing greater transparency into FHA's servicing loan review process - helping servicers better understand how FHA intends to hold them accountable for loan-level compliance.

Key updates in the proposed draft include:

• Six new defect areas that align with FHA requirements through the servicing lifecycle - Servicer Operations, Account Administration, Delinquent and Default Servicing, Loss Mitigation Processing, Home Retention, and Home Disposition;
• Severity tier descriptions that explain how FHA determines whether defects require corrective servicing action or other response based on the impact of non-compliance on FHA, the property, or both; and
• Expanded, servicing-specific remedies that align with severity tiers listed in each area.

Interested stakeholders are encouraged to review and provide feedback to the draft Defect Taxonomy for Servicing Loan Reviews during a 60-day period from October 28, 2021, through December 27, 2021. Instructions for providing feedback are posted on the Drafting Table.

FHA INFO 2021-90 - FHA Publishes Updates to Single Family Housing Policy Handbook 4000.1

October 26, 2021 - Today, the Federal Housing Administration (FHA) published updates to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). The updates include enhancements and revisions to existing guidance as well as various other technical edits. This newly added language augments and enhances existing policy.
FHA remains committed to making it easier for stakeholders to conduct business by maintaining and enhancing Handbook 4000.1 with regularly scheduled updates to ensure it remains the comprehensive source of policy guidance for single family mortgage originators, servicers, and other stakeholders. Moreover, these updates ultimately support the housing industry by helping bolster access to mortgage credit for homebuyers and homeowners.

This update contains revisions and additions to Handbook 4000.1 Sections I, II, III, and IV, Appendix 7.0, and the Claim Filing Technical Guide. Handbook 4000.1 updates are effective as follows:

• The Handbook 4000.1 Transmittal reflects the incorporation of certain Mortgagee Letter (ML) guidance, which is effective as previously announced in the corresponding ML.
• Changes identified in Section II.A of Handbook 4000.1 may be implemented immediately but must be implemented for mortgages with case numbers assigned on or after January 24, 2022.
• All other changes may be implemented immediately but must be implemented no later than January 24, 2022.

Stakeholders are encouraged to review and familiarize themselves with the changes outlined in Handbook 4000.1. Additionally, a separate redline version of the Handbook 4000.1 has been posted on the Handbook Information Page. The online version of the Handbook 4000.1 is currently being updated and will be available soon.

FHA INFO 2021-87 - For Your Information: Solicitation for New Members of the HUD Housing Counseling Federal Advisory Committee

October 12, 2021 - On October 5, 2021, the Department of Housing and Urban Development (HUD) published Appointments to the Housing Counseling Federal Advisory Committee; Solicitation of Nominations (Docket No. FR-6222-N-02), in the Federal Register.

This notice announces new members of the Housing Counseling Federal Advisory Committee (HCFAC). Additionally, HUD is seeking nominations to fill four vacancies on the twelve member HCFAC. New members will represent the mortgage industry, real estate industry, consumers, and HUD-approved housing counseling agencies.

Nominations may be made by agency officials, members of Congress, the public, professional organizations, and self-nomination. Nominations to the HCFAC must be submitted using the fillable form HUD-90005, Application for Membership on the Housing Counseling Federal Advisory Committee (HCFAC). Each nominee application must be completed in its entirety. Incomplete forms will not be considered for membership.

Nominations must be submitted in PDF format via email to HCFAC.application@hud.gov. Electronic signatures are acceptable. Applications are due no later than November 4, 2021, at 11:59 PM EDT.

Visit HUD's website for more information about the Housing Counseling Federal Advisory Committee and the application form.

FHA INFO 2021-86 - Advance Notice of Proposed Rulemaking: Seeking Stakeholder Comment on a Proposal for Adjustable Rate Mortgages Transitioning from LIBOR to Alternate Indices Published in Federal Register

October 8, 2021 - On October 5, 2021, the Department of Housing and Urban Development (HUD) published an advance notice of proposed rulemaking in the Federal Register (FR), Adjustable Rate Mortgages: Transitioning from LIBOR to Alternate Indices (Docket No. FR-6151-A-01) to collect public comments prior to publishing the proposed rule.

The majority of adjustable rate mortgages (ARMs) insured by the Federal Housing Administration are based on the London Interbank Offered Rate (LIBOR), an interest rate index that will no longer be published after June 30, 2023. In response, HUD has begun to transition away from LIBOR as an approved interest rate index.

HUD is considering a rule that would address a Secretary-approved replacement index for existing loans and provide a transition date consistent with the cessation of the LIBOR index. Additionally, HUD is considering providing a Secretary-approved replacement index for legacy ARMs tied to the LIBOR index. For a replacement index, HUD is also considering the Secured Overnight Funding Rate (SOFR) interest rate index, which would include a compatible spread adjustment to minimize the impact of the replacement. These changes impact forward and Home Equity Conversion Mortgage (HECM) programs.

HUD recognizes there may be operational difficulties for mortgagees to implement the change to a new index. The advance notice of proposed rulemaking specifically requests public comment on the best method of making such a transition for legacy loans and new originations. Comments received from the public will aid the development of policy that is least disruptive for existing loans or cause unnecessary confusion to the industry.

Interested stakeholders are encouraged to review and provide comments on the advance notice of proposed rulemaking within the comment period, which began on October 5, 2021, and concludes on December 6, 2021. For instructions on submitting comments, stakeholders must follow the methods outlined in the Federal Register

FHA INFO 2021-84 - HUD Awards New Single Family Secretary-Held Loan Servicing Contract

October 5, 2021 - Today, the Department of Housing and Urban Development (HUD) is announcing it has awarded a new Single Family Secretary-Held Loan Servicing contract to Information Systems & Networks Corporation (ISN). ISN will be responsible for servicing the following FHA Single Family Secretary-Held Mortgages beginning October 9, 2021:

• Partial Claim Subordinate Mortgages;
• Section 235 Subordinate Mortgages;
• Nehemiah Subordinate Mortgages;
• Emergency Homeowners Loan Program (EHLP) Subordinate Mortgages;
• Asset Control Area (ACA) Mortgages;
• Hope for Homeowners (H4H) Subordinate Mortgages; and
• Good Neighbor Next Door (GNND) Subordinate Mortgages.

This transfer of servicing does not affect to whom borrowers make their primary mortgage payments. Borrowers should continue to make their primary mortgage payments to the entity listed on their monthly mortgage statement.

Beginning October 9, 2021, all required documentation, correspondence and telephone inquiries related to the servicing of the above-referenced Single Family Secretary-Held Mortgages must be directed to ISN as follows:

ISN Corporation - Western Operations Center
Attention: Secretary-Held Loan Servicing
2000 N Classen Blvd Suite #3200
Oklahoma City, Ok 73016

Phone: 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.
Fax: 1-405-724-7800
Email: PCServicing@hud.gov
Payoff Requests: PCPayoffs@hud.gov
Subordination Requests: PCSubordinations@hud.gov Release Requests: PCReleases@hud.gov
Mortgagee Partial Claim document submittal: PCDocs@hud.gov

Emails and phone messages will be responded to during normal hours of operation, Monday through Friday, 7:00 AM - 7:00 PM (Central) on all non-Federal holidays.

NOVAD Management Consulting (NOVAD) will remain responsible for servicing Assigned Secretary-Held Home Equity Conversion Mortgages (HECM) and HECM Subordinate Mortgages.

All-required documentation, correspondence, and telephone inquiries, related to the servicing of the Single Family Secretary-Held HECM loans must be directed to NOVAD as follows:

NOVAD Management Consulting Attention: HECM Servicing
2401 NW 23rd St., Ste. 1A1
Oklahoma City, OK 73107

Phone: 1-800-CALLFHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.
Fax: 1-800-609-9826
HECM Servicer Inquiries: hecmservicing@novadconsulting.com
HECM Payoff Requests: hecm.payoffs@novadconsulting.com

Emails and phone messages will be responded to during normal hours of operation, Monday through Friday, 7:00 AM - 7:00 PM (Central) on all non-Federal holidays.

View additional resources on the Secretary-Held Mortgage Servicing Contractors web page.

FHA INFO 2021-82 - FHA's Financial Requirements for Mortgagee Eligibility Update to Unacceptable Assets

September 30, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-25, Federal Housing Administration's Financial Requirements for Mortgagee Eligibility - Update to Unacceptable Assets. This ML addresses the June 25, 2021 changes to Chapter 7 of the Office of the Inspector General (OIG) General Audit Guidance (OIG Audit Guide) Handbook 2000.04. These changes impact FHA-approved mortgagees and entities applying for FHA approval.

The OIG Audit Guide, Chapter 7 - FHA-Approved Lenders Audit Guidance, has been changed to include an updated, expanded list of unacceptable assets that mortgagees cannot include in their computation of adjusted net worth. Under the Single Family Housing Policy Handbook 4000.1, FHA requires that mortgagees compute their adjusted net worth in accordance with the OIG Audit Guide.

The OIG Audit Guide's changes to Chapter 7:

• Impact mortgagees' continued adjusted net worth obligation and annual recertification financial data submission:
  • Are effective immediately for entities applying for FHA approval and require all FHA-approved mortgagees to be in compliance by December 31, 2021.
  • Specify that the revised guidance applies to all mortgagees approved for FHA Title I and/or Title II programs and to entities applying for FHA approval.
• Update OIG Audit Guide Chapter 7, 7-5, F.1.j - l changes:
  • Ensure that a schedule of "other assets" prepared by a mortgagee is attested to by an Independent Auditor per Generally Accepted Auditing Standards (GAAS) guidelines;
  • Exclude real property, including all land and any buildings attached to it, other than the home office registered with HUD from the computation of adjusted net worth; and
  • Exclude assets designated to offset future expenses, such as prepaid expenses and deferred tax, from the computation of adjusted net worth.

The guidance in today's ML 2021-25 is effective immediately for entities applying for FHA approval. All current FHA-approved mortgagees must be in compliance by December 31, 2021.

FHA INFO 2021-81 - Draft Home Equity Conversion Mortgage Program Sections of Single Family Housing Policy Handbook 4000.1 Posted for Feedback on the Drafting Table

September 29, 2021 - Today, the Federal Housing Administration (FHA) posted the draft Home Equity Conversion Mortgage (HECM) Origination through Servicing sections of its Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) for stakeholder review and feedback. The draft sections contain FHA's proposed comprehensive consolidation of HECM requirements, incorporating approximately 150 Mortgagee Letters and other policy documents that are currently used by mortgagees when originating or servicing HECMs. The draft sections posted today on the Single Family Housing Drafting Table (Drafting Table) are available for industry feedback through Monday, November 15, 2021.

This posting is a continuation of FHA's progress toward a consolidated, authoritative Handbook 4000.1 that will make it easier to do business with FHA. When the final version is eventually published, the HECM Origination through Servicing sections will provide mortgagees, servicers, appraisers, and other stakeholders with a comprehensive policy resource, and replace existing HECM guidance on:

• Origination through Post-Closing and Endorsement;
• Appraiser and Property Requirements;
• Servicing and Loss Mitigation; and,
• Glossary and Acronyms.

Similar to other Handbook 4000.1 sections posted for feedback, the draft HECM Origination through Servicing sections contain revisions to policy language for improved clarity and consistency, proposed new policy, and to conform to the Handbook 4000.1 organizational structure.

These draft sections do not contain policies for HECM non-assignment claims; however, those non-assignment claim sections will be posted for feedback at a future date.

Review and Feedback

To facilitate FHA's review and analysis of feedback, interested stakeholders are strongly encouraged to thoroughly review the content of the draft sections and submit feedback during the 45-calendar day period from Wednesday, September 29, 2021, through Monday, November 15, 2021. Instructions for viewing the draft sections and providing feedback are available on the Drafting Table. FHA will carefully consider all feedback received.

FHA INFO 2021-79 - FHA Provides Additional COVID-19 Forbearance and COVID-19 Home Equity Conversion Mortgage Extensions

September 27, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-24, Extension for COVID-19 Forbearance and COVID-19 Home Equity Conversion Mortgage (HECM) Extensions.

This ML provides:

• Up to six months of COVID-19 Forbearance for borrowers requesting their initial COVID-19 Forbearance on October 1, 2021, through the end of the COVID-19 National Emergency, and an additional six months if the forbearance is exhausted or expires before the end of the COVID-19 National Emergency.

This new option is meant to assist those borrowers who may be newly affected financially by the COVID-19 pandemic and may need relief through the end of the National Emergency.

• An additional six months of forbearance for borrowers who requested their initial COVID-19 Forbearance between July 1, 2021, and September 30, 2021.

This ML also provides the opportunity for additional periods of COVID-19 HECM Extension for HECMs when the initial request is made on October 1, 2021, through the end of the COVID-19 National Emergency, and when the initial COVID-19 HECM Extension request was made between July 1, 2021, and September 30, 2021.

Due to the continuing impacts of the COVID-19 pandemic, particularly the Delta variant, FHA recognizes the need to provide these extension opportunities for the COVID-19 Forbearance and HECM Extension to help those still impacted by the pandemic and who only recently requested assistance or who may need assistance through the end of the COVID-19 National Emergency.

The policies regarding COVID-19 Forbearance and COVID-19 HECM Extensions announced today are effective immediately. Mortgagees and other interested stakeholders are encouraged to thoroughly review ML 2021-24.

More information can also be found in the Single Family Housing Policy Handbook 4000.1, Section III.A.2.o.i — Forbearance for Borrowers Affected by the COVID-19 National Emergency — and in MLs 2020-06, 2020-34, 2020-44, 2021-04, 2021-05, and 2021-15.

Proposed 40-Year Loan Modification Policy for COVID-19 Recovery Options Posts on Single Family Housing Drafting Table for Feedback

September 27, 2021 - Today, the Federal Housing Administration (FHA) posted a draft Mortgagee Letter (ML) proposing a future addition of a 40-year loan modification combined with a partial claim. The modification is being considered for inclusion in FHA's COVID-19 Recovery Loss Mitigation Options. The draft ML posted today on FHA's Single Family Housing Drafting Table (Drafting Table) for public feedback.

The proposed addition of this 40-year loan modification is intended to help certain borrowers reach the targeted reduction of 25 percent of the monthly principal and interest portion of their mortgage payments.

Interested stakeholders are encouraged to thoroughly review and provide feedback on the draft ML during a 30-calendar day period from September 27, 2021, through October 27, 2021. Instructions for viewing the ML and providing feedback are available on the Drafting Table. FHA will carefully consider all feedback received.

As a reminder, this draft ML is not official departmental policy and may not be used in connection with any FHA-insured mortgages. FHA's existing policies remain in effect until amended.

FHA INFO 2021-77 - Mandatory Transition to FHA Catalyst: Electronic Appraisal Delivery Module

September 15, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-23, "Mandatory Transition to the Federal Housing Administration (FHA) Catalyst: Electronic Appraisal Delivery (EAD) Module for FHA Single Family Appraisals."
The guidance in this ML establishes mandatory transition dates for mortgagees to submit appraisals for single family forward and reverse mortgage endorsements through the FHA Catalyst: EAD Module. The Home Equity Conversion Mortgage (HECM) appraisal submission functionality is a new capability immediately available within the module.

Mortgagees must deliver appraisals through the FHA Catalyst: EAD Module based on the following mandatory transition dates:

• Effective on and after March 14, 2022, appraisal delivery through the FHA Catalyst: EAD Module is mandatory for all cases unless a previous appraisal version has been submitted to the legacy EAD portal.
• For cases with a previous appraisal submission in the legacy EAD portal before March 14, 2022, appraisal resubmissions may continue to be delivered through the legacy EAD portal until April 15, 2022.
• After April 15, 2022, appraisal submissions for all cases, regardless of previous submission status, must be delivered through the FHA Catalyst: EAD Module.

Until further notice, the FHA Catalyst: EAD Module will only accept appraisal resubmissions for cases initiated in the module. Prior to April 15, 2022, FHA will notify mortgagees in an upcoming FHA INFO when the FHA Catalyst: EAD Module is available to receive resubmissions initiated in the legacy EAD portal.

Registration and Onboarding Information Existing EAD Portal Users

Existing legacy EAD portal user information will automatically be registered in the FHA Catalyst: EAD Module. These users will receive an email from FHACatalyst@hud.gov with instructions on how to complete registration.

New FHA Catalyst: EAD Module Users

New users seeking access to the module must ask their FHA Connection (FHAC) coordinator to email the completed FHA Catalyst External User Access Request Form to the FHA Resource at answers@hud.gov. This form may also be used to modify or terminate user access. The existing EAD Administrator function is not available in the FHA Catalyst: EAD Module at this time.

Technology Service Providers

For mortgagees or their technology service providers seeking to establish direct integration access to FHA Catalyst: EAD Module, the onboarding process will occur in waves, which are tentatively scheduled for October, November, and December 2021. To sign up for a wave, requests must be submitted by email to answers@hud.gov with the subject line: "Catalyst EAD Module Wave Registration."

Application Programming Interface (API) Developers

API developers can request a copy of the Developer's Guide, which defines the supported data standards for electronic appraisal submissions to the FHA Catalyst: EAD Module, by email at answers@hud.gov.

Additional Resources

Mortgagees are encouraged to review the FHA Catalyst: EAD Module External User Guide and the FHA Catalyst: EAD Module web page for further information. Upcoming trainings will also be communicated via FHA INFO at a later date.

In addition, this update will be incorporated in an upcoming version of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2021-75 - Single Family Default Loan Reporting Transitions to the FHA Catalyst Platform

September 13, 2021 - Today, FHA published Mortgagee Letter (ML) 2021-21, FHA Catalyst: Single Family Default Monitoring System (SFDMS) Reporting Module. This ML announces the transition for reporting of delinquent FHA Title II Single Family forward mortgages in SFDMS from FHA Connection (FHAC) to the FHA Catalyst. The new module enhances data integrity and integrates with existing capabilities currently on the FHA Catalyst platform.

Note the important dates below:

• September 13, 2021: Onboarding begins for all FHA Catalyst: SFDMS Reporting Module users.
• November 5, 2021: The last day that mortgagees will be able to process default reporting through FHAC.
• December 1, 2021: Mortgagees will be required to submit default data in the FHA Catalyst: SFDMS Reporting Module or through the Electronic Data Interchange (EDI).

Updated Default Reporting Codes and Data Elements

Additionally, the ML updates and streamlines the data elements submitted as part of default reporting. The ML also updates and adds fatal error codes to ensure data integrity in FHA portfolio reporting. Mortgagees may reference the SFDMS Reporting Codes and Reporting Data Elements document, which was revised to reflect these new codes and data elements.

Onboarding Information

All mortgagees, including those currently using SFDMS in FHAC, must request access and complete onboarding to the FHA Catalyst: SFDMS Reporting Module prior to the December 1, 2021, mandatory use date.

To request access, email the completed FHA Catalyst: External User Access Request Form to the FHA Resource Center at answers@hud.gov. The form is also available on the FHA Catalyst: SFDMS Reporting Module web page.

FHA INFO 2021-74 - Reminder Guidance for FHA-Approved Mortgagees Regarding Presidentially- Declared Major Disaster Areas

September 10, 2021 - Today, the Federal Housing Administration (FHA) is issuing this reminder to mortgagees about its guidance for originating and/or servicing FHA-insured mortgages in locations in the U.S. and its territories when the President declares a major disaster area during the COVID-19 pandemic. A major disaster is declared when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. FHA recognizes the difficulty facing many borrowers across the country during a pandemic when also impacted by recent hurricanes, wildfires, and other extreme weather events. This guidance is intended to provide clarity to industry partners to assist borrowers impacted by these disasters.

To date, the President has declared a major disaster in every state and most territories in connection with COVID-19. Loss mitigation options for PDMDAs declared as a result of COVID-19 National Emergency, are addressed in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) Section III.A.2.o. For borrowers who are already on a COVID-19 Loss Mitigation Option or a COVID-19 Recovery Option — including a forbearance — before the date of the PDMDA, mortgagees must continue to follow the loss mitigation guidance in Handbook 4000.1 Section III.A.2.o and Mortgagee Letters 2021-15, 2021-18, and 2021-19.

For all other borrowers, the mortgagee must evaluate the borrower for all loss mitigation options available to them, including any PDMDA or COVID-19 Loss Mitigation Options or COVID-19 Recovery Options, as applicable, based on their reason for hardship.
The following guidance applies to mortgaged properties in areas covered by PDMDA declarations not related to the COVID-19 National Emergency:

• FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration.
  • FHA provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence a foreclosure action or evaluate the borrower under HUD's Loss Mitigation Program for borrowers in PDMDAs.
• Mortgagees should begin reaching out to affected borrowers who may require loss mitigation assistance as soon as possible post-disaster.
• For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Handbook 4000.1 Section III.A.2.n.iii, Monitoring of Repairs to Substantially Damaged Homes.
• FHA-insured Home Equity Conversion Mortgages (HECM) secured by properties located in a PDMDA, that are due and payable for reasons other than the death of the last surviving borrower or the end of a Deferral Period due to the death of an eligible non-borrowing spouse, are subject to a 90-day extension of HECM foreclosure timelines, as most recently provided for in FHA INFO 18-40.
• In PDMDAs, FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure extension expiration date to commence or recommence a foreclosure action.

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review:

• FHA's 203(h) Mortgage Insurance for Disaster Victims requirements in Section

II.A.8.b of the Handbook 4000.1. The 203(h) program allows FHA to insure mortgages for victims of a major disaster who have lost their homes and are in the process of rebuilding or buying another home.

• FHA's 203(k) Rehabilitation Mortgage Insurance Program requirements in Section

II.A.8.a of the Handbook 4000.1. The 203(k) program provides mortgage financing or refinancing which includes the cost of home repairs - both structural and non- structural - into the loan amount.
Mortgagees can find more information about the policies referenced above and other FHA PDMDA and FHA COVID-19 policies on the FHA Resource Center's Online Knowledge Base.

FHA INFO 2021-73 - A Message from FHA on Safeguarding Renters

September 8, 2021 - In the wake of the Supreme Court's decision that invalidated the Centers for Disease Control and Prevention's (CDC) eviction moratorium, the team at the Federal Housing Administration (FHA) wants to share with you that the U.S. Department of Housing and Urban Development (HUD) is using every tool at our disposal to help safeguard the millions of the nation's individuals and families now in danger of losing their homes.

Our programs and resources protect HUD-assisted households from eviction and should be sought out by all Americans who are seeking assistance in avoiding eviction, relocating to new homes in the event an eviction moves forward, and fighting unfair evictions. Through our Office of Fair Housing and Equal Opportunity, we are ready to protect people of color, families with children, people with disabilities, LGBTQ people, and others who may disproportionately face eviction through discriminatory policies and practices.

HUD also has a responsibility to assist landlords, owners, public housing authorities, and all of our stakeholders in weathering this public health crisis.
HUD and our partners are taking a broad range of actions to help prevent evictions. They include:

Fighting unfair evictions - HUD is making over $19 million available to fair housing partners to help them respond to possible fair housing violations, many of which relate to the pandemic and evictions. The funds will enable private fair housing enforcement organizations to respond to fair housing inquiries and complaints, conduct fair housing testing, and implement education and outreach activities related to the COVID-19 pandemic. The funds will also be used to address fair housing issues affecting individuals and families experiencing housing instability, including those who may face displacement due to discriminatory evictions and foreclosures. HUD is also ramping up funding and education for HUD-approved housing counseling agencies to work with clients to understand their options if they are facing eviction.

Providing legal assistance - HUD is making $20 million available to non-profit or governmental entities to improve the availability of legal assistance at no cost to low- income tenants at risk of or subject to eviction. These funds will provide services in areas

with high rates of evictions or prospective evictions, including rural areas. This grant program plays an integral role in helping individuals and families—including people of color, people with limited English proficiency, and people with disabilities—avoid eviction or minimize the disruption and damage caused by the eviction process.

Keeping people housed - HUD has instituted an eviction moratorium to protect borrowers with HUD-supported or FHA-insured mortgages. This includes people living on Tribal lands with HUD Section 184 Indian Home Loans. HUD will also act to require public housing authorities and owners participating in HUD's project-based rental assistance program to provide tenants facing eviction for non-payment of rent with additional time and other protections to allow them the opportunity to secure emergency rental assistance that may stave off eviction entirely. For the duration of the presidentially-declared national emergency related to the COVID-19 pandemic, HUD will extend the time its programmatic regulations require before a tenant must vacate a unit once a notice of lease termination for non-payment has been issued from 14 days to 30 days, consistent with Coronavirus Aid, Relief, and Economic Security (CARES) Act protections and the protections already in place for FHA-insured Multifamily mortgages where the borrower is under a forbearance agreement. Additionally, in order to initiate eviction, HUD may require additional steps of covered landlords.

Connecting people with rent and utility relief - HUD is working with the Department of Treasury to help Emergency Rental Assistance Program (ERAP) grantees connect tenants behind on rent and utilities with financial assistance. Throughout this year, HUD has brought our expertise on housing programs to Treasury, providing advice and assistance on program design and implementation, and engaged HUD-approved housing counseling agencies. As part of a whole-of-government approach, we call on state and local ERAP grantees to lean into the flexibilities provided in this program and get assistance out quickly to those who need it the most.

Providing tools to help public housing authorities, HUD-assisted landlords/tenants, and people experiencing homelessness - HUD program offices have delivered webinars, created documents answering frequently asked questions, granted waivers to ease administrative burdens created by the pandemic, and are distributing relief resources such as Emergency Housing Vouchers and additional assistance to people experiencing homelessness as quickly as possible.
HUD is here to help. You can find more information on rent relief and you can also contact to your local field office.

FHA INFO 2021-71 - FHA New COVID-19 Recovery Loss Mitigation Options Webinar and Video Presentations Available

September 2, 2021 - On July 23, 2021, the Federal Housing Administration (FHA) issued FHA INFO 21-61, FHA Establishes New, Streamlined COVID-19 Recovery Loss Mitigation Options, which announced the publication of Mortgagee Letter (ML) 2021-18, COVID-19 Recovery Loss Mitigation Options. That FHA INFO also contained references to a forthcoming COVID-19 Recovery Options training webinar as well as an on-demand industry update webinar.

Today, we are announcing the availability of the new COVID-19 Recovery Loss Mitigation Options training webinar as announced in FHA INFO 21-61. Additionally — and in lieu of the Industry Update Webinar — a new video message from Julienne Joseph, FHA's Deputy Assistant Secretary (DAS) for the Office of Single Family Housing, is now available for viewing.

FHA INFO 2021-70 - FHA Announces Temporary Partial Waivers to Its Home Equity Conversion Mortgage Policy for Borrowers Impacted by COVID-19

September 2, 2021 - Today, the Federal Housing Administration (FHA) issued the following temporary partial waivers to its Home Equity Conversion Mortgage (HECM) policies. These waivers provide mortgagees with expanded flexibility to help senior homeowners with HECMs who are struggling financially due to COVID-19.

• Temporary partial waiver of Mortgagee Letter 2015-11. This waiver allows mortgagees to offer repayment plans to HECM borrowers with unpaid property charges regardless of their total outstanding arrearage and is effective through June 30, 2022.
• Temporary partial waiver of Mortgagee Letter 2016-07. This waiver permits mortgagees to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and insurance on or after March 1, 2020. Additionally, it eliminates the three-year waiting period for such assignments. The waiver is effective through June 30, 2022.

As the nation continues its COVID-19 recovery, these waivers offer relief to HECM borrowers who were unable to make timely property charge payments due to financial hardships resulting from the pandemic.

Mortgagees are encouraged to thoroughly review both waivers and the policies outlined in Mortgagee Letters 2015-11 and 2016-07.

FHA INFO 2021-66 - FHA Announces Waivers to the Review Requirements for Its COVID-19 Advance Loan Modification and COVID-19 Recovery Options

August 5, 2021 - Today, the Federal Housing Administration (FHA) issued the following partial waivers to its policies pertaining to COVID-19 Advance Loan Modification (COVID-19 ALM) and COVID- 19 Recovery Loss Mitigation Options (COVID-19 Recovery Options):

• Partial Waiver of the Borrower Review Requirements for the COVID-19 Advance Loan Modification in Handbook 4000.1 and Mortgagee Letter 2021-18
• Partial Waiver of the Re-Review of Borrower Requirements for the COVID-19 Recovery Loss Mitigation Options in Mortgagee Letter 2021-18.

These waivers address the mortgagee’s timeframes and borrower eligibility for a required review or re-review for the COVID-19 ALM and the COVID-19 Recovery Options.

Mortgagees are encouraged to thoroughly review the two waivers that posted today as well as the COVID-19 ALM and COVID-19 Recovery Options policies outlined in ML 2021-15 and ML 2021-18, respectively.

FHA INFO 2021-62 - Extension of Foreclosure Related Eviction Moratorium and Expiration of the Foreclosure Moratorium

July 30, 2021 - Today, FHA published Mortgagee Letter (ML) 2021-19, Extension of the Foreclosure- Related Eviction Moratorium and Expiration of the Foreclosure Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency.

With today's ML, FHA is extending its foreclosure-related eviction moratorium for foreclosed borrowers through September 30, 2021. This extension ensures borrowers with FHA-insured mortgages are not immediately displaced from their homes as well as provides them more time to apply for federal, state, or local housing resources or request assistance from a HUD-approved housing counseling agency.

Additionally, the ML reminds mortgagees of the July 31, 2021, expiration of the foreclosure moratorium announced in ML 2021-15.

This guidance applies to all Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs except for FHA-insured mortgages secured by vacant or abandoned properties.

FHA INFO 2021-61 - FHA Establishes New, Streamlined COVID-19 Recovery Loss Mitigation Options

July 23, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-18, COVID-19 Recovery Loss Mitigation Options. This ML reinforces FHA's commitment to helping homeowners who have been financially impacted by the COVID-19 pandemic to remain in their homes with new, streamlined loss mitigation options.

This ML amends FHA's COVID-19 Loss Mitigation policies for borrowers with FHA-insured forward mortgages, as found in Section III.A.2.o., Presidentially-Declared COVID-19 National Emergency, of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). It establishes the COVID-19 Recovery Loss Mitigation Options (COVID-19 Recovery Options) “waterfall” that streamlines and revises FHA's previous options for struggling homeowners, reduces documentation requirements, and provides greater payment reduction options for eligible homeowners with FHA-insured Single Family Title II forward mortgages.

The simple two-step waterfall options intended for properties that are occupied as the homeowner's primary residence are:

1. COVID-19 Recovery Standalone Partial Claim: for homeowners who can resume making their current monthly mortgage payments, the COVID-19 Recovery Standalone Partial Claim allows mortgage payment arrearages to be placed in a zero-interest subordinate lien against the property that is repaid when the mortgage terminates, usually when the homeowner refinances or sells the home.
2. COVID-19 Recovery Modification: for homeowners who cannot resume making their current monthly mortgage payments, the COVID-19 Recovery Modification extends the term of the mortgage to 360 months at a fixed rate and targets reducing the borrower's monthly principal and interest portion of their monthly mortgage payment. The COVID- 19 Recovery Modification must include a Partial Claim if the homeowner has Partial Claim funds available.

For properties that are not occupied by the owner, mortgage servicers must offer eligible homeowners FHA's COVID-19 Recovery Non-Occupant Loan Modification, which extends the term of the mortgage to 360 months, or less if requested by the homeowner, at a fixed interest rate.

Mortgage servicers may begin offering the new COVID-19 Recovery Options as soon as operationally feasible; however, they must begin using the new options for eligible homeowners within 90 days of the date of this ML. Today's ML does not impact previously announced effective dates for the COVID-19 Advance Loan Modification (COVID-19 ALM) in ML 2021-15, dated June 25, 2021.

In addition, mortgage servicers must re-review homeowners for the new COVID-19 Recovery Options in circumstances where an existing home retention option has not been completed, where the homeowner was previously ineligible for a COVID-19 home retention option, or if the homeowner has re-defaulted after a COVID-19 home retention option.

FHA remains committed to helping homeowners with FHA-insured forward mortgages who are struggling financially due to the COVID-19 pandemic by continually assessing its policy guidance and making changes where possible. The new, streamlined COVID-19 Recovery Options announced today are another example of the measures FHA is taking to provide homeowners with needed relief. FHA strongly encourages its mortgage servicing partners and other stakeholders to thoroughly review this policy document.

Training Opportunity

FHA is currently developing an on-demand training webinar to help mortgage servicers and other stakeholders better understand the details of the new COVID-19 Recovery Loss Mitigation Options. The training provides mortgage servicers with information on how to implement options for homeowners with FHA-insured mortgages who need assistance to remain in their homes.

This new, self-paced training will be posted for viewing on the FHA Servicing & Loss Mitigation Classroom and Webinar Training page, and its availability will be communicated in a future FHA INFO.

FHA INFO 2021-59 - FHA Publishes New Handbook 4000.1 Update

July 20, 2021 - Today, the Federal Housing Administration (FHA) published a new update to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). The updates include enhancements and revisions to existing guidance as well as various other technical edits. In most cases, however, this newly added language augments and enhances existing policy.

FHA remains committed to making it easier for mortgagees to conduct business by maintaining and enhancing Handbook 4000.1 with regularly scheduled updates to ensure it remains the comprehensive source of policy guidance for single family mortgage originators, servicers, and other stakeholders.

Highlights of updates to Handbook 4000.1 include:

• Section I — Doing Business with FHA
  • Clarifies lender approval policies and that a mortgagee must fully comply with all eligibility requirements to be approved by FHA to originate, underwrite, close, endorse for insurance, service, purchase, hold, or sell FHA Title I or Title II mortgages at the time of approval, and continue to meet those requirements at all times.
  • Updates the case binder submission requirements for the Test Case Phase of Title II Direct Endorsement (DE) Authority by clarifying that a mortgagee must submit all Test Case files using the FHA Catalyst: Case Binder Module; and relocating test case requirements previously located in Handbook 4000.1 Section II.A.7.d.vii. to Section I.A.5.a.iii(A)(3)(a) of the Handbook.
• Section II — Origination through Post-Closing/Endorsement
  • Eliminates the need for a partial waiver of current hazard, liability, and flood insurance coverage requirements for certain types of condominium projects that do not qualify as a Site Condominium.
• Updates protocols for Transfer of Control from the developer or builder to the unit owners to align with market practices and state and local requirements.
• Incorporates policy guidance on student loan payment calculations from ML 2021-13 as well as providing an exception for student loans in forbearance due to COVID-19.
• Section III — Servicing and Loss Mitigation
  • Revises disclosure and submission guidance for Voluntary Termination of Mortgage Insurance.
  • Updates guidance to require requests for exceeding Property Preservation allowances be submitted at least five days prior to conveyance of the property.
  • Incorporates policy guidance on the COVID-19 Advanced Loan Modification and COVID-19. Forbearance policies from ML 2021-15
  • Updates the effective date of Section III - Servicing and Loss Mitigation, Appendix 4.0, and Appendix 5.0, as HUD extended the implementation date for this guidance in ML 2021-14.
• Section IV — Claims and Disposition
  • Clarifies alternative claim review documentation that HUD will accept as proof of tax payment from a tax monitoring service.
• Section V — Quality Control, Oversight and Compliance
  • Clarifies the required documentation for a mortgagee's quality control program by stating all applicable documents must be dated to demonstrate compliance with retention and reporting time frames.
  • Incorporates policies requiring mortgagees not approved for eCaseBinder (eCB) submission through FHA Connection must use the FHA Catalyst: Case Binder Module to submit both Single Family forward and reverse (Home Equity Conversion Mortgage) case binders that were requested through the Loan Review System (LRS) for post-endorsement technical review.
  • Incorporates policy guidance on the number of Early Payment Defaults that require an appraisal field review and clarify property and appraisal Quality Control review requirements to align with Property Acceptability Criteria and Appraiser and Property Requirements for Title II Forward and Reverse Mortgages.

Stakeholders are encouraged to review and familiarize themselves with the changes outlined in the Handbook 4000.1 transmittal in their entirety. Additionally, a separate redline version of the Handbook 4000.1 has been posted on the Handbook Information Page.

FHA INFO 2021-55 - COVID-19 Loss Mitigation Polices Update Webinar and Updated Frequently Asked Questions

July 9, 2021 - Today, the Federal Housing Administration (FHA) is announcing the availability of the pre- recorded webinar that discusses in greater detail the policies outlined in Mortgagee Letter 2021-15, Extension of the Foreclosure and Eviction Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency, Further Expansion of the COVID19 Forbearance and the COVID-19 Home Equity Conversion Mortgage (HECM) Extensions, and Establishment of the COVID-19 Advance Loan Modification (COVID-19 ALM). This training was previously announced in FHA INFO #21-48, dated June 25, 2021.

Beginning July 14, 2021, servicers of FHA-Insured mortgages and other interested stakeholders in FHA transactions can access this no cost, on demand webinar on the FHA Servicing and Loss Mitigation Training web page on hud.gov.

Additionally, the Frequently Asked Questions on this same topic are now available in the FHA Resource Center Knowledge Base, or by contacting the Resource Center directly at the email address or phone number listed below under the Need Support? section.

FHA INFO 2021-52 - FHA Announces Revisions to Property and Appraisal Quality Control Review Requirements

June 30, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-17, Revisions to Property and Appraisal Quality Control Review Requirements. The ML updates FHA Single Family Quality Control (QC) requirements for appraisal field reviews and the evaluation of property and appraisal documentation for all FHA Title II Single Family programs.

It also announces the expiration of the December 4, 2020, temporary waiver of Single Family QC requirements for appraisal field reviews. The temporary waiver remains in effect for QC reviews currently in process and for cases selected as part of a mortgagee's QC review through June 30, 2021.

FHA initially issued the temporary waiver during the COVID-19 pandemic to provide mortgagees with flexibilities when conducting field reviews of appraisals on FHA-insured mortgages selected for monthly QC. The temporary waiver is no longer needed as the nation transitions out of the COVID-19 national emergency.

The ML also revises policy guidance applicable to mortgages selected for property and appraisal QC review on or after July 1, 2021. Specifically, the ML:

• decreases the appraisal field review requirement for early payment defaults from 100 percent to 10 percent;
• reinforces appraisal field review requirements for discretionary targeting and other specific risk factors; and
• clarifies property and appraisal QC review guidelines.

This updated policy guidance is intended to reduce mortgage origination costs and help expand access to mortgage credit to more borrowers while continuing to mitigate risk to FHA through targeted appraisal field review requirements.

The policies announced in today's ML 2021-17 will be incorporated into a future update of FHA's Single Family Housing Policy Handbook 4000.1.

FHA INFO 2021-50 - FHA Extends Temporary COVID-19 Guidance for Verification of Self-Employment; Rental Income; and 203(k) Rehabilitation Escrow Account

June 29, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-16, Extension of the End Date for COVID-10 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account, which further extends the various temporary policy guidance initially announced in ML 2020-24, dated July 29, 2020, and last extended in ML 2021-07, dated February 23, 2021.

This ML includes extending:

• Additional guidance to industry partners regarding the verification of business operations for self-employed borrowers;
• Verification of rental income policy guidance; and
• Guidance for the administration of the 203(k) rehabilitation escrow for borrowers in forbearance.

The self-employment and rental income policy extensions are effective immediately for case numbers assigned on or before September 30, 2021.

Additionally, the extended guidance for the administration of the 203(k) rehabilitation escrow for borrowers in forbearance is effective immediately for open escrow accounts through September 30, 2021.

These policy extensions are temporary; therefore, they will not be incorporated into any future update to FHA's Single Family Housing Policy Handbook 4000.1.

FHA INFO 2021-49 - FHA Catalyst Module Now Includes Enhanced Features for Claim Submissions

June 28, 2021 - On June 25, 2021, the Federal Housing Administration (FHA) released enhancements to the the FHA Catalyst: Claims Module as part of FHA's ongoing efforts to expand its technology capabilities. The platform enhancements provide mortgagees with additional options and flexibilities for claim submissions within FHA Catalyst.

The following functionalities are now available on the FHA Catalyst: Claims Module, which allows mortgagees to:

• Receive notification that prevents duplicate claim submissions.
• Add documents and/or files to an existing claim submission.
• Complete the actions below using an application programming interface (API), a web based interface:
  • Search for a single claim;
  • Search in bulk for multiple claims;
  • Submit multiple claims;
  • Retrieve status on multiple claims;
  • Download the status details on each claim made in bulk submissions; and
  • Recheck the status on suspended claims.

To support users of the FHA Catalyst: Claims Module, mortgagees should review the updated FHA Catalyst: Claims Module Single Family Forward Claims User Guide.

Mortgagees can request access to modules within the FHA Catalyst platform from the FHA Resource Center by emailing at: answers@hud.gov or calling: 1-800-CALL-FHA (1-800- 225-5342).

FHA INFO 2021-48 - FHA Further Extends Foreclosure and Eviction Moratoria and Start Date for COVID-19 Forbearance and Home Equity Conversion Mortgage Extensions; Establishes a New COVID-19 Advance Loan Modification

June 25, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-15, Extension of the Foreclosure and Eviction Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency, Further Expansion of the COVID- 19 Forbearance and the COVID-19 Home Equity Conversion Mortgage (HECM) Extensions, and Establishment of the COVID-19 Advance Loan Modification (COVID-19 ALM).This ML clarifies additional measures to help homeowners with FHA-insured mortgages who are struggling due to COVID-19.

FHA is committed to helping homeowners with FHA-insured mortgages who are at risk of losing their homes due to the COVID-19 pandemic by continually assessing its policy guidance and making changes where possible. The extensions and new COVID-19 ALM announced today are examples of the measures FHA has taken to provide needed relief in conjunction with the Biden-Harris Administration's direction announced on June 24, 2021. The guidance in ML 2021-15:

• Extends the foreclosure and eviction moratoria for all FHA-insured single family mortgages — except vacant or abandoned properties — through July 31, 2021.
• Expands FHA's COVID-19 Forbearance policy by:
  • the date to request an initial COVID-19 Forbearance from June 30, 2021, until September 30, 2021. Borrowers who request an initial COVID-19 forbearance between July 1, 2021, and September 30, 2021, will receive a maximum six-month forbearance or payment pause.
  • providing an additional three-month extension to the COVID-19 Forbearance for borrowers who began their initial forbearance between July 1, 2020, and September 30, 2020.
• Establishes a new COVID-19 Advance Loan Modification (COVID-19 ALM), which:
  • offers borrowers who are currently 90 or more days delinquent, or at the end of their COVID-19 Forbearance, the opportunity for a 30-year rate and term mortgage modification that will bring their mortgage current and reduce the principal and interest portion of their monthly mortgage payment by at least 25 percent.
  • requires servicers to review their FHA-insured servicing portfolios and proactively reach out to homeowners who meet the criteria for the COVID- 19 ALM. Eligible borrowers will be contacted by their servicer with information on how to receive the COVID-19 ALM.
  • continues to offer all other available FHA loss mitigation options to borrowers who do not accept the ALM for any reason.
• Expands HECM COVID-19 Extensions by:
  • extending the time frame in which seniors with HECMs may request an extension before the servicer may request the loan be called due and payable from June 30, 2021, to September 30, 2021. Borrowers who request an initial extension between July 1, 2021, and September 30, 2021, will receive a maximum six-month extension.
  • providing an additional three month extension to HECM borrowers, where an initial HECM extension period began between July 1, 2020, and September 30, 2020.

FHA strongly encourages servicers and all other interested stakeholders to review this ML carefully and thoroughly to ensure compliance with the latest FHA policies.

FHA INFO 2021-46 - FHA Delays Effective Date for the Servicing and Loss Mitigation Section III, Appendices 4.0 and 5.0 of Handbook 4000.1 until March 31, 2022

June 24, 2021 - Today, FHA published Mortgagee Letter 2021-14, Extension of Implementation Date for the April 19, 2021 Publication of the Single Family Housing Policy Handbook 4000.1, which extends until March 31, 2022, the effective date for updated policies for Section III - Servicing and Loss Mitigation, Appendix 4.0 - FHA-Home Affordable Modification Program (FHA-HAMP) Calculations, and Appendix 5.0 - HUD Schedule of Standard Possessory Action and Deed-In-Liew of Foreclosure Attorney Fees, of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). The effective date for all other changes published on April 19, 2021, continue to have an August 17, 2021, effective date.

By extending the effective date of Section III and corresponding appendices, FHA- approved servicers can better focus their efforts on aiding borrowers with FHA-insured mortgages who need loss mitigation assistance as a result of the COVID-19 pandemic.

FHA INFO 2021-44 - Expiration of Temporary Guidance for Re-verification of Employment and Exterior-Only Appraisal Scope of Work Option

June 22, 2021 - Today, the Federal Housing Administration (FHA) is issuing this reminder that the temporary guidance concerning FHA's re-verification of employment, and exterior-only appraisal scope of work option policies will expire as intended on June 30, 2021.

This temporary guidance was first announced on March 27, 2020, in ML 2020-05, Re- verification of Employment and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted by COVID-19 consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The policies in ML 2020-05 were updated with publication of ML 2020-37 to address the removal of the Desktop-Only option, and last extended through June 30, 2021, by ML 2021-06 on February 23, 2021.

Because recent data reflects low usage, FHA believes the expiration of this guidance will have a minimal impact to the industry.

FHA INFO 2021-43 - FHA Announces Updates to Student Loan Debt Policies Allowing Greater Access to Mortgage Credit

June 18, 2021 - Today, the Federal Housing Administration (FHA) announced the publication of Mortgagee Letter (ML) 2021-13, Student Loan Payment Calculation of Monthly Obligation. This ML updates the monthly mortgage payment calculation for borrowers with student loan debt who apply for FHA-insured mortgages. This updated guidance will provide greater access to mortgage credit for those — including people of color as well as those in the 25 to 49 years old age group — who are traditionally burdened with student loan debt.

This updated policy amplifies FHA's commitment to enhancing its programs by breaking down longstanding barriers to affordable homeownership opportunities, including student loan debt, and will:

• Further HUD's mission of providing access to mortgage credit while ensuring borrowers maintain a long-term ability to repay their debt.
• Remove potential roadblocks for borrowers making student loan payments that are struggling to qualify for an FHA-insured mortgage due to their debt-to-income (DTI) ratios being based on an implied repayment, rather than on an actual monthly repayment amount(s).
• Revise the way in which FHA calculates monthly student loan liabilities for borrowers making payments and those without payments currently due when determining DTI ratios for qualifying potential borrowers for FHA-insured financing.
• Align FHA standards to current industry standards and better reflect the myriad of student loan repayment alternatives offered through the U.S. Department of Education.

The guidance in the ML applies to all FHA-insured Title II forward mortgage programs except non-credit qualifying streamline refinances, which do not require evaluation of the borrower's debts.

Mortgagees may begin implementing this policy guidance immediately; however, it must be implemented for all mortgages with case numbers assigned on or after August 16, 2021.

At the core of FHA's mission is the belief that that every person deserves the chance to live with security, dignity, and hope in a place they can call their own. Removing student loan debt barriers is only one part of HUD’s commitment to do everything it can to help advance affordable homeownership opportunities in the U.S., particularly in communities of color and other underserved communities.

FHA INFO 2021-34 - FHA Clarifies Eligibility for Certain Non-Permanent Residents to Apply for FHA-Insured Mortgages

May 28, 2021 - Today, the Federal Housing Administration (FHA) announced the publication of Mortgagee Letter 2021-12, Eligibility Requirements for Certain Non-Permanent Resident Borrowers, that formalizes and updates requirements for certain non-permanent residents seeking to obtain insured mortgage financing under FHA’s Single Family Title I and Title II forward mortgage insurance programs. The guidance in this ML may be implemented immediately; however, it must be implemented for mortgages with case numbers assigned on or after July 26, 2021.

The guidance issued in today’s ML — coupled with updates to the Residency Requirements section of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) — clarifies the:

• eligibility requirements FHA-insured mortgage financing for individuals participating in the “Deferred Action for Childhood Arrivals” (DACA) program; and
• employment documentation requirements for citizens of the Freely Associated States (FAS) and for individuals with H-1B status.

FHA stakeholders should thoroughly review ML 2021-12 to better understand these policy updates.

FHA INFO 2021-30 - FHA Catalyst: Case Binder Module Release Includes Various System Enhancements

May 17, 2021 - Today, the Federal Housing Administration (FHA) is implementing several enhancements to the FHA Catalyst: Case Binder Module, which enables mortgagees to electronically deliver case binders for single family forward mortgages and Home Equity Conversion Mortgage loans.

These enhancements will allow mortgagees to respond more quickly, securely, and accurately to FHA’s request for electronic case binders, while receiving updates on submission statuses.

The FHA Catalyst: Case Binder Module updates include:

• Submission Type and Location Drop-Down Options
  • The following drop-down menu options offer more flexibility when uploading case binder submissions:
    • Case Binder Submission Type - “Other”
    • Location Type - “HUD-HQ”
  • Submission Type “Other” and Location Type “HUD-HQ” will be used by HUD to request a case binder for an administrative purpose that does not fit into existing drop-down categories and identifies the location of the person who requests the case binder.
  • The information above is included in the case binder request and allows the mortgagee to indicate why the case binder is being submitted and where it should be routed to within FHA Catalyst.
• System Upload Notifications
  • Mortgagees receive a virus scan failure alert when uploading a case binder.
  • The system applies a hard stop, then displays a message when the case binder file name exceeds the character limits preventing the file from uploading.

In addition, all mortgagees may receive emails regarding case binder requests from FHA Connection (FHAC) to be uploaded to FHA Catalyst. To ensure receipt of these communications, mortgagees are encouraged to keep their email contact information current within the Lender Electronic Assessment Portal (LEAP) and FHAC as applicable.

For more guidance on utilizing the new capabilities, users should reference the updated FHA Catalyst: Case Binder Module User Guide and visit FHA's Knowledge Base to view frequently asked questions.

Mortgagees may also request access to the module from the FHA Resource Center by emailing: answers@hud.gov or calling: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2021-28 - Clarification Regarding the Review of Borrowers in a Pandemic-Related Forbearance for a COVID-19 Loss Mitigation Option

May 7, 2021 - It has been brought to the attention of the Federal Housing Administration (FHA) that some mortgagees and others are unclear about when it is appropriate to begin reviewing borrowers for COVID-19 loss mitigation options.

FHA requires that mortgagees review borrowers for the COVID-19 loss mitigation options upon the completion or expiration of the borrower’s forbearance period; however, as clarification, it is permissible for mortgagees to begin reviewing borrowers for COVID-19 loss mitigation options at any point prior to the completion or expiration of their COVID-19 or other pandemic-related forbearance period. Further, a borrower does not need to exit forbearance to be reviewed for a COVID-19 loss mitigation option.

FHA encourages mortgagees to review borrowers for available COVID-19 loss mitigation options as soon as practicable as these options are designed to help borrowers resolve their delinquencies and avoid foreclosure.

FHA INFO 2021-27 - Amendments to HECM Non-Borrowing Spouse Requirements

May 6, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-11, Amendments to HUD’s Non-Borrowing Spouse Policy for all Home Equity Conversion Mortgage (HECM) Loans. This ML implements additional protections for eligible non- borrowing spouses (NBS) on all HECMs.

Specifically, ML 2021-11:

• Expands criteria that will begin a deferral period for HECMs with case numbers assigned on or after August 4, 2014;
• Expands assignment criteria for Mortgagee Optional Election (MOE) Assignments for HECMs with case numbers assigned before August 4, 2014;
• Eliminates the requirement for an eligible NBS to establish marketable title or other legal rights to remain in the property following the death of the HECM borrower; and
• Expands NBS protections to include a borrower residing in a healthcare facility for more than 12 consecutive months.

These program changes should improve the efficiency and long-term viability of the program by aligning all HECMs — regardless of case number assignment date — under the same HECM MOE Assignment policies as previous announced in ML 2019-15. These changes also streamline processes and reduce administrative costs for both mortgagees and HUD by eliminating a disparity in servicing policies based, in part, on FHA case number assignment dates.

The program changes also have a positive impact on HECM borrowers since now all HECM NBS can take advantage of the expanded deferral period and MOE Assignment, which provides non-borrowing spouses with increased options to remain in their homes without having to repay the HECM loan or face foreclosure.

Mortgagees have the option of immediately following the new requirements announced in ML 2021-11; however, mortgagees must begin to comply with the new requirements in this ML no later than 120 days from its publication date.

FHA INFO 2021-25 - FHA Issues Temporary Partial Wavier of Appraisal Requirements in Changing Markets

April 27, 2021 - Today, the Federal Housing Administration (FHA) issued a Temporary Partial Waiver to parts of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Section II.D.4.c.iii.(F)(2): FHA Appraisal Requirements in Changing Markets – Required Analysis and Reporting. This partial waiver addresses difficulty in changing markets with increasing property values and a shortage of housing supply.

To address this, FHA is issuing this temporary partial waiver of the Handbook 4000.1 requirement in Section II.D.4.c.iii.(F)(2) that the appraiser must include, analyze, and report a minimum of two active listings or pending sales on the appraisal grid. This temporary partial waiver of established policy will help ensure the continued availability of affordable housing in these markets.

FHA roster appraisers must continue to comply with Handbook 4000.1 requirements for comparable selection, adjustments, and inclusion of proper data collection and reporting of market conditions on Fannie Mae Form 1004MC/Freddie Mac Form 71.

This temporary partial waiver is effective for the 12-month period between April 26, 2021, and April 26, 2022.

FHA INFO 2021-23 - Updated Servicing and Loss Mitigation Section of Handbook 4000.1 Publishes

April 19, 2021 - Today, the Federal Housing Administration (FHA) announced the publication of the Servicing and Loss Mitigation section (Section III) of the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1). These updates strengthen FHA’s loss mitigation approaches for struggling borrowers while streamlining key requirements for servicers.

In addition, the policy revisions align with industry standards, and reduce and update outdated requirements and processes. These changes will improve outcomes for borrowers facing financial hardship and reduce the burden on both borrowers and servicers.

The Servicing and Loss Mitigation section also incorporates policy and process improvements identified by FHA, and through industry feedback received from its July 14, 2020, posting on the Single Family Housing Drafting Table.

Key updates to and benefits of this section will include:

• A revised loss mitigation waterfall that allows servicers to review struggling borrowers for a permanent FHA Home Affordable Modification Program (FHA- HAMP) home retention option without a lengthy forbearance. This approach has been proven to be highly effective at helping borrowers avoid redefault and foreclosure;
• Streamlined documentation requirements to avoid unnecessary delays and to align more closely with standard industry servicing practices, including removing signature requirements on Trial Payment Plans; and

A revised structure for certain allowable costs and fees that corresponds with fee structures used by other industry participants.

To provide mortgagees sufficient time to implement the policies and processes announced in the Servicing and Loss Mitigation section of Handbook 4000.1, the updates to HUD’s policies will become effective 120 days after today’s publication, unless otherwise noted.

Mortgagees may begin to implement these updates to HUD’s policies immediately but must begin doing so no later than August 17, 2021.

The changes in this section are not highlighted as many sections have been simplified and moved. Mortgagees should review the updated Servicing and Loss Mitigation section in its entirety. A redline version of Handbook 4000.1 is available on the Single Family Housing Policy Handbook 4000.1 Information page on hud.gov to aid in the review.

Other Changes in Handbook 4000.1

In addition to the many revisions throughout the Servicing and Loss Mitigation section, Handbook 4000.1 also includes the incorporation of various policy guidance implemented through Mortgagee Letters and appendices since the most recent November 18, 2020 update. Stakeholders are encouraged to thoroughly review the updated Handbook 4000.1— as well as the Handbook Transmittal — to familiarize themselves with the revisions.

FHA INFO 2021-18 - FHA Implements Several FHA Catalyst Module Enhancements and Updates User Resources

March 29, 2021 - On Friday, March 26, 2021, the Federal Housing Administration (FHA) released technology updates to FHA Catalyst— FHA’s information technology initiative — that improve and enhance the user experience.

These enhancements give mortgagees the ability to delete incorrect appraisal submissions for documents in the FHA Catalyst: Electronic Appraisal Delivery Module, a component within the FHA Catalyst: Property Valuation Module. Upgrades that enable users to access compliance rules and view hard stop and error messages on the appraisal details page were also deployed.

In addition, the following documents were recently updated to support users of various FHA Catalyst modules:

• FHA Catalyst: Electronic Appraisal Delivery Module | Electronic Appraisal Delivery - Appraisal Management Company User Guide
• FHA Catalyst: Property Valuation Module | Electronic Appraisal Delivery - Lender Administrator Guide
• FHA Catalyst: Property Valuation Module | Electronic Appraisal Delivery - Lender User Guide
• FHA Catalyst: Claims Module | Single Family Forward Claims User Guide

Mortgagees are encouraged to reference these documents and additional module resources from the FHA Catalyst page on HUD.gov.

To access to the FHA Catalyst modules, mortgagees should contact the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2021-17 - Expiration of Temporary Guidance for the Endorsement of Mortgages Under Forbearance

March 23, 2021 - Today, the Federal Housing Administration (FHA) is issuing this reminder regarding the pending expiration of the temporary guidance concerning endorsement processes for mortgages where a borrower was granted a forbearance related to the COVID-19 National Emergency prior to the loan being endorsed for FHA insurance.

This temporary guidance was first published on June 4, 2020, in Mortgagee Letter (ML) 2020-16, Endorsement of Mortgages under Forbearance for Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It was last extended in ML 2020-45, dated December 17, 2020.

During the nine months of availability, fewer than three percent of FHA-approved mortgagees requested endorsement of such mortgages. Because of its limited usage, FHA believes the expiration of this guidance will have a minimal impact to the industry.

Therefore, the temporary provisions will expire on March 31, 2021. 

FHA INFO 2021-14 - Now Available: Revised FHA Condominium Loan-Level/Single-Unit and FHA Condominium Project Approval Questionnaire Forms (HUD-9991 and HUD-9992)

March 15, 2021 - Today, the Federal Housing Administration (FHA) announced the publication of Mortgagee Letter (ML) 2021-09, Announcement of Revised Form HUD-9991, FHA Condominium Loan Level/Single-Unit Approval Questionnaire and Revised Form HUD-9992, FHA Condominium Project Approval Questionnaire. This ML announces the immediate availability of the revised forms. Both forms have been streamlined to provide greater clarity for those doing business with FHA.

Form HUD-9991 is used to process single-unit and loan-level approvals for both forward mortgages and Home Equity Conversion Mortgages (HECM). Form HUD-9992 is used to process condominium project approval applications. The forms were originally published in the Federal Register on August 15, 2019, as part of the Condominium Project Approval Final Rule, and were later approved for required use beginning January 2, 2020. The forms were subsequently published in the Federal Register for public comment and have now been revised in response to the public comments received.

Mortgagees may begin using these revised forms immediately; however, the revised form HUD-9991 must be used for case numbers assigned on or after May 17, 2021. Additionally, form HUD-9992 must be used for initial project approval and recertifications submitted on or after May 17, 2021.

Changes to these forms do not alter any other requirements found in the Single Family Housing Policy Handbook 4000.1 (SF Handbook).

FHA INFO 2021-13 - LIBOR Index Removal and SOFR Index Approval for New HECM ARMs and Other Changes for HECM ARM Originations

March 11, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-08, Home Equity Conversion Mortgage (HECM) Program - Changes to Interest Rate Requirements Including Removal of the London Interbank Offered Rate (LIBOR) Index.

This ML implements the following changes to the requirements for originating HECM adjustable interest rate mortgages:

• Removes approval for use of the LIBOR index for adjustable interest rate HECMs;
• Approves the Secured Overnight Financing Rate (SOFR) index and permits mortgagees to commingle index types for newly originated annual adjustable interest rate HECMs when establishing the expected average mortgage interest rate using the U.S. Constant Maturity Treasury (CMT) and the initial mortgage interest rate (Note rate) and periodic Note rate adjustments using the SOFR index; and
• Sets zero as the “floor” for the index value used to determine the Note rate to mitigate against uncertainty and risks posed by negative index rates.

This ML also announces new model Note language, which is included in the revised model loan documents (first and second HECM Adjustable Interest Rate Notes) and incorporates the changes described in the ML. The revised model loan documents are available on the Single Family Mortgages Model Documents web page.

ML 2021-08 establishes the timeline for discontinuing the eligibility of FHA insurance for new LIBOR-based adjustable interest rate HECMs. However, when originating LIBOR- based adjustable interest rate HECMs, it is important for mortgagees to consider the requirements of the HECM investor and Ginnie Mae’s All Participant Memorandum 20-19 regarding the March 1, 2021, deadline for making LIBOR-based adjustable interest rate HECM products ineligible for Ginnie Mae securitizations.

FHA INFO 2021-10 - FHA Extends Temporary Guidance for Re-verification of Employment and Exterior-Only Appraisal Scope of Work Option Through June 30, 2021

February 23, 2021 - Today's Mortgagee Letter (ML 2021-06), Extension of Re-verification of Employment and Exterior-Only Appraisal Scope of Work (SOW) Option for Federal Housing Administration (FHA) Single Family programs Impacted by the Coronavirus Disease of 2019 (COVID-19):

• Continues the re-verification of employment guidance issued in ML 2020-05 for cases closed on or before June 30, 2021; and
• Extends the exterior-only appraisal SOW option first announced in ML 2020-37 for appraisals with an effective date on or before June 30, 2021.

Because this policy guidance is temporary and designed specifically to help mitigate the continuing impacts of the COVID-19 pandemic on individuals and families, it will not be incorporated into a future update to FHA’s Single Family Housing Policy Handbook 4000.1.

FHA Extends Temporary COVID-19 Guidance for Verification of Self-Employment; Rental Income; and 203(k) Rehabilitation Escrow Account

February 23, 2021 - Mortgagee Letter 2021-07, Extension of the End Date for COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account, further extends the various temporary policy guidance initially announced in ML 2020-24, dated July 29, 2020. This ML provides:

• Additional guidance to industry partners regarding the verification of business operations for self-employed borrowers; and
• Extends verification of rental income policy guidance.

These two policy extensions are effective immediately for case numbers assigned on or before June 30, 2021.

Additionally, the extended guidance for the administration of the 203(k) rehabilitation escrow for borrowers in forbearance is effective immediately for open escrow accounts through June 30, 2021. 

FHA INFO 2021-09 - FHA Extends its Foreclosure and Eviction Moratoria and Expands Temporary COVID-19 Forbearance and Servicing Polices to Provide Additional Homeowner Relief

February 16, 2021 - Recognizing the financial and other hardships many individuals and families are facing due to the ongoing COVID-19 pandemic, the Federal Housing Administration (FHA) is expanding its relief efforts to assist homeowners with FHA-insured mortgages.

In today’s Mortgagee Letter (ML) 2021-05, Extensions of Single Family Foreclosure and Eviction Moratorium, Start Date of COVID-19 Initial Forbearance, and Home Equity Conversion Mortgage (HECM) Extension Period; Expansion of COVID-19 Loss Mitigation Options, FHA outlines multiple COVID-19 related policy extensions and expansions that are designed make it easier for mortgagees to provide FHA-insured homeowners with the assistance they need to retain their homes during these challenging times.

The updated guidance in this ML is effective immediately and applies to all FHA Title II Single Family programs. The ML:

• Extends the foreclosure and eviction moratoriums through June 30, 2021, and provides a 180-day extension to the deadlines for the first legal action and the reasonable diligence time frame from the date of the moratorium expiration;
• Extends the dates to request an initial COVID-19 Forbearance or a COVID-19 Home Equity Conversion Mortgage (HECM) extension period through June 30, 2021;
• Adds two COVID-19 Forbearance and COVID-19 HECM extension periods of up to three months each for borrowers who requested their initial COVID-19 Forbearance or COVID-19 HECM extension period on or before June 30, 2020, and are coming to the end of their 12 month period;
• Expands eligibility for the COVID-19 loss mitigation options for certain borrowers regardless of whether they received a COVID-19 Forbearance; and
• Eliminates the restriction on the number of permanent COVID-19 home retention options a borrower can receive.

For more information, read today’s Mortgagee Letter 2021-05.

Industry Webinar
In the coming days, FHA servicers and other interested parties will be able to access a pre- recorded webinar in which the various policy updates outlined in ML 2021-05 will be discussed in more detail. Viewing information and training materials will be available on the FHA Single Family Events and Training web page.

FHA INFO 2021-08 - FHA Publishes its Annual Notice of Administrative Actions taken by the Mortgagee Review Board in the Federal Register

February 12, 2021 - Today, the Federal Housing Administration (FHA) published in the Federal Register (FR) (Docket No. FR-6426-N-01), its annual notice of all completed administrative actions taken by the U.S. Department of Housing and Urban Development’s (HUD) Mortgagee Review Board from October 1, 2019, through September 30, 2020.

The FR Notice provides a description of, and the cause for, the Mortgagee Review Board’s administrative actions against HUD-approved mortgagees in 58 fact-based cases and 17 annual recertification violations.

FHA INFO 2021-07 - FHA Issues Multiple COVID-19 Temporary Policy Waivers

February 3, 2021 - Today, the Federal Housing Administration (FHA) announced several temporary provisions issued through policy waivers to help mitigate the impacts of the COVID -19 pandemic on borrowers with FHA-insured mortgages and mortgagees. These provisions are part of the Biden Administration’s ongoing efforts to provide economic relief in response to the coronavirus pandemic. The following waivers build upon previously issued waivers and will be effective through December 31, 2021:

• Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers
• Temporary Partial Waiver of Mortgagee Letter (ML) 2017-05: Home Equity Conversion Mortgages (HECM) Claim Type 22 (CT-22) Assignment Requests
• Temporary Partial Waiver of ML 2015-11: Waive $5,000 Cap on Property Charge Repayment Plan.

Temporary Regulatory and Handbook Waivers: Alternative Methods for Face-to-Face Interviews with Borrowers

February 3, 2021 - The temporary Regulatory and Handbook waivers allow mortgagees to utilize alternative methods for conducting borrower interviews, which are used to gather and convey information to assess the borrower’s circumstances, and to determine appropriate repayment plans as part of the early default intervention requirements of FHA default servicing. These waivers are effective through December 31, 2021.

Temporary Partial Waiver of ML 2017-05: HECM Claim Type CT-22 Assignment Requests

February 3, 2021 - This temporary partial waiver of ML 2017-05 allows mortgagees to submit a CT-22 Assignment Claim without having to obtain a signature f rom the HECM borrower on an occupancy certification. Mortgagees must continue to obtain the HECM borrower's annual certification. This temporary waiver is effective through December 31, 2021.

Temporary Partial Waiver of ML 2015-11: Waive $5,000 Cap on Property Charge Repayment Plan

February 3, 2021 - This temporary partial waiver of ML 2015-11, allows mortgagees to offer a recalculated repayment plan for unpaid property charges to HECM borrowers regardless of the total outstanding arrearage following a failed repayment plan. This temporary partial waiver is effective through December 31, 2021.

FHA INFO 2021-06 - FHA Updates Its COVID-19 Forbearance Start Date and Home Equity Conversion Mortgage (HECM) Extension Period

January 26, 2021 - In support of the Biden Administration’s plan to provide economic relief for the individuals and families suffering financial impacts f rom the coronavirus pandemic, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-04, Update to the COVID-19 Forbearance Start Date and the COVID-19 Home Equity Conversion Mortgage (HECM) Extension Period today.

Effective immediately, this ML extends through March 31, 2021, the deadline for single family borrowers with FHA-insured mortgages to request an initial COVID-19 forbearance from their mortgage servicer to defer or reduce their mortgage payments for up to six months. If needed, this forbearance can be extended for an additional six months. This ML also extends the deadline to request the initial extension period for HECM borrowers impacted by the COVID-19 pandemic.

The means of communication between a borrower and their mortgage servicer regarding a COVID-19 forbearance, and the terms of the COVID-19 forbearance, remain the same as established in ML 2020-06 and ML 2020-22.

FHA INFO 2021-05 - FHA Extends Foreclosure and Eviction Moratorium Policy

January 21, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-03, Extension of Foreclosure and Eviction Moratorium in Connection with the Presidentially- Declared COVID-19 National Emergency. Yesterday, President Joseph R. Biden directed agencies to extend a federal moratorium on evictions and a moratorium on foreclosures on federally guaranteed mortgages in response to the coronavirus pandemic. This ML announces a moratorium of foreclosures and evictions for single family properties with FHA-insured mortgages through March 31, 2021.

The moratorium applies to all FHA Title II Single Family forward mortgages and Home Equity Conversion Mortgages (HECM), except for those secured by vacant or abandoned properties.

This ML also extends the deadlines for the first legal action and reasonable diligence timelines for 120 days f rom the date of expiration of this moratorium for FHA-insured Single Family mortgages, except as noted above. 

FHA INFO 2021-04 - FHA to Permit DACA Status Recipients to Apply for FHA Insured Mortgages

January 20, 2021 - Effective January 19, 2021, the Federal Housing Administration (FHA) is permitting individuals classified under the "Deferred Action for Childhood Arrivals" program (DACA) with the U.S. Citizenship & Immigration Service (USCIS) and are legally permitted to work in the U.S. are eligible to apply for mortgages backed by the FHA.

Prior to today's announcement, the FHA Single Family Housing Handbook ("Handbook 4000.1 Section II.A.1.b.ii(A)(9)(c) includes this statement: "Non-US citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages." This language was incorporated into the FHA Handbook by the Obama Administration in September 2015 although it was first incorporated into FHA guidelines in 2003.

The term "lawful residency" pre-dates DACA and thus did not anticipate a situation in which a borrower might not have entered the country legally, but nevertheless be considered lawfully present. To avoid confusion and provide needed clarity to HUD's lending partners, FHA is waiving the above referenced FHA Handbook subsection in its entirety. In a subsequent update to the FHA Handbook the language will be removed.

Other FHA requirements remain in effect for all potential borrowers including DACA status recipients:

• the property will be the borrower's principal residence;
• the borrower has a valid Social Security Number (SSN), except for those employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD;
• the borrower is eligible to work in the U.S., as evidenced by the Employment Authorization Document issued by the USCIS; and
• the borrower satisfies the same requirements, terms, and conditions as those for U.S. citizens.

The Employment Authorization Document is required to substantiate work stat us. If the Employment Authorization Document will expire within one year and a prior history of residency status renewals exists, the lender may assume that continuation will be granted. If there are no prior renewals, the lender must determine the likelihood of renewal based on information f rom the USCIS.

A borrower residing in the U.S. by virtue of refugee or asylee status granted by the USCIS is automatically eligible to work in this country. The Employment Authorization Document is not required, but documentation substantiating the refugee or asylee status must be obtained.

FHA INFO 2021-03 - FHA Introduces a Unified View of Case Records with Launch of the FHA Catalyst: Servicing Module

January 19, 2021 - Today, the Federal Housing Administration (FHA) launched the new FHA Catalyst: Servicing Module. With this first release, the module introduces the framework that will enable mortgagees to view unified case records in a singular platform and is part of FHA's ongoing efforts to support the entire loan lifecycle through FHA Catalyst.

The Servicing Module uses FHA case information retained in the FHA Catalyst: Single Family Origination Module to perform servicing queries, which is the first time two modules are connecting data within FHA Catalyst. Effective January 19, 2021, the initial functionality within the FHA Catalyst: Servicing Module will allow servicers to:

• Receive periodic mortgage insurance premium (PMIP) due notification data.
• Query a case electronically using web-based interfaces (application programming interface [API] and user interface [UI]). Servicers can retrieve case details by a single or bulk case query. FHA Catalyst will retrieve case details for cases associated with their Lender ID.

Additionally, the functionality eliminates the need to submit duplicative fields, reducing personally identifiable information (PII) transmission.

Access to the FHA Catalyst: Servicing Module and its corresponding API Guide for implementation instructions, is available to stakeholders upon request only by emailing the FHA Resource Center at: answers@hud.gov or by calling: 1-800-CALL-FHA (1-800-225-5342).

Servicers are also encouraged to review the FHA Catalyst: Servicing Module User Guide and other resources on the module's web page.

Uniform Closing Dataset Collection Now Available through the FHA Catalyst: Single Family Origination Module

January 19, 2021 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2021-02, FHA Catalyst: Single Family Origination Module - Uniform Closing Dataset (UCD). This ML announces expanded mortgage origination capabilities, initially introduced in ML 2020-35, within the FHA Catalyst platform.

Beginning January 19, 2021, mortgagees may begin using the FHA Catalyst: Single Family Origination Module for the optional submission of the UCD for FHA Title II Single Family forward mortgage programs. The UCD refers to a common industry dataset that allows information on the Closing Disclosure to be communicated electronically. Under FHA's existing requirements, mortgagees are required to review and retain the Closing Disclosure as part of the case binder and, where applicable, to deliver the case binder to FHA. Now mortgagees have the option of submitting the UCD in FHA Catalyst prior to endorsement. Module users may also access additional information on the FHA Catalyst: Single Family Origination Module web page.

FHA is offering a conduit on the FHA Catalyst platform to accept FHA Connection (FHAC) Business-to-Government (B2G) submissions for Insurance Application functions. The conduit is available to mortgagees that are currently set up to do this directly with FHAC.

The policy updates contained in today's ML s will be incorporated in an upcoming revision of the Single Family Housing Policy Handbook 4000.1 (SF Handbook).

Access to the FHA Catalyst: Single Family Origination Module – UCD and FHAC B2G submissions are available upon request only by emailing the FHA Resource Center at: answers@hud.gov or by calling: 1-800-CALL-FHA (1-800-225-5342).

Release of Application Programming Interface Specification for Integration within FHA Catalyst: Claims Module

January 19, 2021 - Today, the Federal Housing Administration (FHA) announced the release of an application programming interface (API) specification for all Single Family forward mortgage claim types within the FHA Catalyst: Claims Module. The API specification allows servicers to develop a web-based interface between the module and their systems to facilitate electronic claim submissions.

The API specification is now available for use by request only. To access the API specification, stakeholders can request access by emailing the FHA Resource Center at: answers@hud.gov or by calling: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2021-02 - FHA Connection Updated to Collect Expanded Home Mortgage Disclosure Act Data

January 12, 2021 - Today, the Federal Housing Administration (FHA) announced that FHA Connection (FHAC) will be updated to capture expanded borrower demographic information that aligns with the Home Mortgage Disclosure Act (HMDA) regulations.

The expanded demographic information that will be collected in FHAC includes ethnicity, race, and sex, and complies with the revised Regulation C of HMDA. This additional information also aligns with the options provided on the redesigned Uniform Residential Loan Application (URLA/Fannie Mae Form 1003) as well as the Demographic Information Addendum to the existing URLA for forward mortgages, and the Residential Lo an Application for Reverse Mortgages (Fannie Mae Form 1009).

The changes in FHAC will be effective and available on March 1, 2021. Demographic data previously entered under fields which are replicated in the revised FHAC screens will rollover.

FHAC Revised Screens

• Insurance Application
• Home Equity Conversion Mortgage (HECM) Insurance Application
• Borrower/Address Change
• Mortgage Credit Reject

The Ethnicity, Race, and Sex fields will be optional selections and users may select all boxes that apply. The question regarding how demographic information was provided is a required field and, if the application was taken in person, additional questions are required to be answered.

FHAC Business to Government Submissions

The FHAC Business to Government (B2G) submission requirements have also been updated to accommodate the new demographic information. Refer to the B2G Interface webpage for technical requirements. B2G submissions in the new format will be required no later than June 1, 2021.

Technology Open to Approved Lenders Scorecard

The Technology Open To Approved Lenders (TOTAL) Mortgage Scorecard will not be updated at this time and will continue to upload to FHAC the HMDA data provided in the legacy format. Any update to TOTAL Mortgage Scorecard will be communicated in the future.

FHA INFO 2021-01 - A New FHA INFO Single Family News and Updates Email is Coming Soon - Same Great Information with a Brand New Look

January 7, 2021 - The Federal Housing Administration's (FHA) Office of Single Family Housing is excited to announce that we'll begin publishing our FHA INFO Single Family News and Updates email — our primary industry stakeholder communication vehicle — through a new digital communications platform in the coming days. We're also updating the FHA INFO's look and introducing new options that will allow you to manage your subscription in real time. The new FHA INFO was redesigned to make it easier to read and access information on FHA Single Family Housing news including policy announcements, Mortgagee Letters, Federal Register notices, Single Family Housing Policy Handbook updates, training and educational offerings, job opportunities, and more.

To get ready for this change, please review the following:

What is changing?

Your FHA INFO will have a refreshed look and come from a new email address, FHAInfo@public.govdelivery.com. Plus, you'll have the ability to manage your subscription at any time and subscribe to news from other offices within HUD's Office of Housing (Multifamily and Manufactured Housing, Healthcare Facilities, and Housing Counseling).

What do I need to do to continue receiving this communication?

You will automatically begin receiving the new FHA INFO; however, you should add FHAInfo@public.govdelivery.com to your email's safe senders list. This will ensure that the FHA INFO is not sent to your spam or junk folder.

How do I manage my subscription or subscribe to receive other HUD-related digital communications, or unsubscribe?

Access the Email Updates page to update your subscription, select subscriptions, or delete your account.

Who do I contact for additional support or questions?

Click on Help at the bottom of any FHA INFO issued through the new platform or at the bottom of any of the subscription web pages. You may also contact the FHA Resource Center by email at: answers@hud.gov or call: 1-800- CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339. Additionally, you can visit the Single Family Housing Frequently Asked Questions website to obtain answers 24/7 at: www.hud.gov/answers.

Remember to add the new email address - FHAInfo@public.govdelivery.com - to your safe senders list to ensure you continue to receive these communications. Also, please share this information with your colleagues.

FHA INFO 2020-97 - FHA to Release TOTAL Mortgage Scorecard Version 4.0

December 30, 2020 -On January 1, 2021, the Federal Housing Administration (FHA) will implement a new version of its Technology Open To Approved Lenders (TOTAL) Mortgage Scorecard. This new version incorporates adjustments to maintain and improve upon predictiveness as part of FHA’s continual revalidation of the TOTAL scoring model.

As stated in the Single Family Housing Policy Handbook 4000.1 (SF Handbook), FHA from time to time will release new versions of the TOTAL Mortgage Scorecard. All Mortgages being scored for the first time will be scored using the new version. For Mortgages with a case number, the Mortgages will be scored using the version that was effective when the case number was assigned. Existing Mortgages scored without a case number will be scored according to the version number tag that is provided in the TOTAL file by the Automated Underwriting System (AUS) provider (if none, then the current version will be used). All Mortgages without a case number will be scored using the new version 90 Days after the new version is implemented.

FHA INFO 2020-96 - Updated Addendum to Uniform Residential Loan Application (Form HUD-92900-A) Now Available

December 22, 2020 -Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-49, Revised Form HUD-92900-A, HUD Addendum to Uniform Residential Loan Application, which announced that the updated loan-level certification — Form HUD-92900-A — is now available.

Over the past year, FHA has made significant strides in its efforts to provide regulatory clarity and transparency within its Office of Single Family Housing programs. With the October 2019 signing of a Memorandum of Understanding between the Department of Housing and Urban Development (HUD) and the U.S. Department of Justice, followed by the implementation of the Defect Taxonomy Version 2, and new annual lender certifications earlier this year, this new loan- level certification furthers FHA’s commitment to provide the industry with certainty and clarity with respect to its program requirements.

The updated Addendum to Uniform Residential Loan Application — which is available for immediate use — contains significant revisions and reorganizes the Form HUD-92900-A in a logical, easy-to-read, and understandable format, and eliminates duplicative information.

It is important to note that the changes outlined in ML 2020-49 specifically apply to HUD loan transactions only. Lenders must continue using the existing combined HUD-92900-A/VA Form 26-1802a when processing loans to be guaranteed by the Department of Veterans Affairs (VA). The VA will issue a revised or replacement form in the near future.

Updates to FHA Manufactured Housing Criteria for Appraisal Comparable Selection

December 22, 2020 -Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-48, Manufactured Housing Appraisal Sales Comparison Approach Update. This ML updates the appraisal standards for sales comparison approach for a category of manufactured housing that meets Fannie Mae's MH Advantage® or Freddie Mac's CHOICEHome® program certification requirements. These programs established construction and design attributes that exceed the Department of Housing and Urban Development’s (HUD) Manufactured Home Construction and Safety Standards (MHCSS).

FHA made these changes to ensure the selection of the appropriate appraisal comparable sales of this unique category of manufactured housing. The ML applies to mortgages secured by manufactured homes insured under FHA Title II Single Family forward and reverse (Home Equity Conversion Mortgage) mortgage programs.

This guidance is effective immediately for appraisals dated on or after December 22, 2020, through December 31, 2022. During this effective period, FHA will monitor the performance of this guidance to determine if adjustments are necessary. All policy updates will be incorporated in an upcoming revision of the Single Family Housing Policy Handbook 4000.1 (SF Handbook).

FHA INFO 2020-95 - FHA Extends the Expiration Dates for Multiple COVID-19 Related Policies

December 21, 2020 -Today, the Federal Housing Administration (FHA) announced extensions to several temporary provisions previously instituted through Mortgagee Letters (ML) and policy waivers to help mitigate the impacts of th e COVID-19 pandemic on borrowers with FHA-insured mortgages and mortgagees. These extensions, listed below, include:

• Extension of the foreclosure and eviction moratorium for FHA-insured Single Family mortgages through February 28, 2021;
• Extension of the date for approving an initial forbearance requested by an FHA borrower due to financial hardships resulting from COVID-19, through February 28, 2021; and
• Extension of the temporary provisions for endorsement processes for mortgages where a borrower has been granted a forbearance related to COVID-19 prior to the loan being endorsed for FHA insurance through March 31, 2021.

See the following MLs and policy waivers for additional details and the effective dates for the policies.

• Mortgagee Letter 2020-43: Extension of Foreclosure and Eviction Moratorium in Connection with the Presidentially- Declared COVID-19 National Emergency. This ML announces the further extension of the foreclosure and eviction moratorium that is currently in place. This moratorium, which is effective until February 28, 2021, is for all Single Family FHA-insured mortgages, except those secured by vacant and abandoned properties. The ML also extends the post-moratorium deadlines for the first legal action and reasonable diligence timelines for 120 days.
• Mortgagee Letter 2020-44: Second Update to the COVID-19 Forbearance Start Date and the COVID-19 Home Equity Conversion Mortgage (HECM) Extension Period. This ML announces the further extension of the effective date for approving an initial COVID-19 Forbearance or for granting an extension to a HECM deadline as outlined in ML 2020-06, through February 28, 2021.
• Temporary Partial Waiver of Mortgagee Letter 2017-05: Home Equity Conversion Mortgage (HECM) Claim Type 22 (CT-22) Assignment Requests. This temporary partial waiver of ML 2017-05 continues the flexibilities provided in a previous waiver to allow for mortgagees to submit a CT-22 Assignment Claim without having to obtain a signature from the HECM borrower on an occupancy certification if they are able to verify the occupancy through other means, such as email, or verbally. This temporary waiver is effective through February 28, 2021.
• Temporary Partial Waiver of Mortgagee Letter 2015-11: Loss Mitigation Guidance for Home Equity Conversion Mortgages (HECMs) in Default due to Unpaid Property Charges. This temporary partial waiver continues the flexibilities provided in a previous waiver to allow mortgagees to offer a recalculated repayment plan for unpaid property charges to HECM borrowers regardless of the total outstanding arrearage. This temporary partial waiver is effective through February 28, 2021.
• Temporary Regulatory and Handbook Waivers of Requirements to send Delinquency Notices to Mortgagors on a COVID-19 Forbearance. For borrowers on a COVID-19 Forbearance, these waivers provide temporary relief for mortgagees from the requirements to send delinquency notices related to borrowers in default. These waivers are designed to address potential confusion and uncertainty surrounding policy changes enacted due to the COVID-19 National Emergency.
• Mortgagee Letter 2020-45: Extension of Temporary Guidance for Endorsement of Mortgages under Forbearance for Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This ML extends the temporary provisions for endorsement processes originally contained in ML 2020-16 for mortgages where a borrower has been granted a forbearance related to the Presidentially-Declared COVID-19 National Emergency prior to the loan being endorsed for FHA insurance. This extension is effective for pending endorsements through March 31, 2021.
• Mortgagee Letter 2020-46: Extension of Temporary Guidance for COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account. This ML announces the further extension of the verification of business operations options for self -employed borrowers and rental income guidance and the administration of the 203(k) Rehabilitation Escrow guidance outlined in ML 2020-24, and extended through ML 2020-40, to case numbers assigned on or before February 28, 2021.
• Mortgagee Letter 2020-47: Extension of Re-verification of Employment and Exterior-only Appraisal scope of work option for Federal Housing Administration (FHA) Single Family programs impacted by the Coronavirus Disease of 2019 (COVID-19). This ML announces the further extension of the re-verification of employment guidance in ML 2020-05; and extends the exterior-only appraisal inspection option in ML 2020-37, through February 28, 2021.

FHA INFO 2020-94 - FHA Catalyst: Claims Module Now Accepting the Submission of All FHA Forward Mortgage Claim Types

December 16, 2020 - Today, the Federal Housing Administration (FHA) announced the addition of the remaining Single Family forward mortgage claim types within the FHA Catalyst: Claims Module. With these additions, servicers can now electronically submit all FHA Single Family Title II forward mortgage claim types within the module.

The remaining claim types were added to the module on December 15, 2020, and are now available for submission through FHA Catalyst.

• Single Family Loan Sale claims (Claim Type 02)
• Claims Without Conveyance of Title (CWCOT) (Claim Type 06)
• Pre-Foreclosure Sale (PFS) claims (Claim Type 07)
• Hawaiian Home Land Mortgages (Section 247 Mortgages) claims (Claim Type 02)
• Insured Mortgages on Indian Land (Section 248 Mortgages) claims (Claim Type 02)

For guidance on submitting claims using the new functionality, servicers are encouraged to review the updated FHA Catalyst: Claims Module Single Family Forward Claims User Guide. Additional module resources can be accessed on the FHA Catalyst: Claims Module web page. The FHA Catalyst claims submission capabilities were initially announced in Mortgagee Letter 2020-38.
Access to the FHA Catalyst: Claims Module is available upon request only by contacting the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2020-93 - Correction to Single Family Housing Policy Handbook 4000.1 Section II.A.8.i.v Regarding LTV Financing Limits for New Construction

December 10, 2020 - Today, the Federal Housing Administration (FHA) issued a correction to Section II.A.8.i.v of the recently published update to its Single Family Housing Policy Handbook 4000.1 (SF Handbook). The published and redlined SF Handbook versions — which were announced on November 18, 2020, in FHA INFO #20-85, Updates to FHA Single Family Housing Policy Handbook 4000.1 Incorporate Previously Issued Policy and Other Revisions, — inadvertently did not replace the language in Section II.A.8.i.v.

Due to an editing error, the referenced subsection was inadvertently included as Section II.A.8.i.v, instead of being replaced in accordance with the new policy consolidating requirements regardless of loan-to-value (LTV) for new construction, as announced on October 22, 2020, in Mortgagee Letter (ML) 2020-36, FHA New Construction Requirements. The SF Handbook has been updated to:

• Remove the “Financing LTV Limit” subsection in the New Construction requirements in accordance with Mortgagee Letter 2020-36; and
• Renumber the remaining subsections in the New Construction section accordingly.

FHA INFO 2020-92 - HUD Does Not Accept Wire Transfers for Secretary-Held Home Equity Conversion Mortgages and Partial Claims

December 8, 2020 - Today, the Federal Housing Administration (FHA) published new Frequently Asked Questions (FAQs) as a reminder of the method by which payoff funds for Secretary-Held Home Equity Conversion Mortgages (HECMs) and Partial Claims can be submitted to FHA. All payoffs for Secretary-Held HECMs and Partial Claims must be sent to HUD's Loan Servicing Contractor, Novad Management Consulting, in the form of certified funds, such as a cashier's check.

FHA does not accept wire transfers to payoff Secretary-Held HECMs or Partial Claims. Any Secretary-Held HECM or Partial Claim payoff statement containing wiring instructions is fraudulent. The recipient of any Secretary -Held HECM or Partial Claim payoff statement that contains wiring instructions should immediately contact the FHA Resource Center by email or by phone at 1-800-CALLFHA (1-800-225-5342) to report that a possibly fraudulent payoff statement has been received and to obtain a correct payoff statement. (Persons with hearing or speech impairments may reach the FHA Resource Center by phone by calling the Federal Relay Service at 1-800-877-8339.)

FHA INFO 2020-91 - New FHA Catalyst: Electronic Appraisal Delivery Module Enhancements Released

December 7, 2020 - Today, the Federal Housing Administration (FHA) announced Release 2.2 of the FHA Catalyst: Electronic Appraisal Delivery (EAD) Module. The module allows mortgagees to electronically submit appraisals for forward mortgage transactions and was the first functionality deployed under the Property Valuation component in FHA Catalyst.

Release 2.2 includes user interface enhancements that streamline hard stop edits and the process for submitting appraisals. Effective immediately, these updates will enable users to view hard stop and error messages on the appraisal detail page without downloading a submission summary report (SSR).

For additional guidance on utilizing the FHA Catalyst: EAD Module, users are encouraged to reference the updated Lender User Guide, Lender Administrator Guide, and the Appraisal Management Company (AMC) User Guide. Additional module resources can be viewed on the FHA Catalyst: Property Valuation Module web page.

The FHA Catalyst: EAD Module is available by request only. To obtain access, mortgagees should contact the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2020-90 - Temporary Waiver of Quality Control (QC) Requirements for Field Reviews of Appraisals

December 4, 2020 - Today, the Federal Housing Administration (FHA) issued a temporary waiver of its Single Family Housing Policy Handbook 4000.1 (SF Handbook) to provide mortgagees with flexibility related to quality control (QC) field reviews of appraisals. This temporary waiver is similar to the temporary partial waiver announced in FHA INFO #20-44 on June 22, 2020.

Considering the social distancing requirements in place in many areas of the country, as a result of the Presidentially - Declared COVID-19 National Emergency, mortgagees may be unable to conduct targeted field reviews of appraisals of FHA-insured mortgages selected for the monthly QC sample. Therefore, FHA is providing mortgagees with flexibility by temporarily waiving part of its requirements found in SF Handbook, Section V.A.3.c.ii(C)(1)(b).

With this waiver, mortgagees are permitted to use third-party tools as an alternative to field reviews of appraisals. Mortgagees must continue to meet all other appraisal QC requirements in the SF Handbook, Section V.A.3.c.ii(C). For example, mortgagees must conduct desk reviews of appraisals following the standards described in Section V.A.3.c.ii(C)(1)(a).

This temporary waiver applies to QC reviews currently in process and for cases selected as part of a mortgagee's QC selections until further notice.

FHA INFO 2020-89 - 2021 Nationwide Forward Mortgage Limits

December 2, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2020-41, 2021 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2021, through December 31, 2021.

This year, the Federal Housing Finance Agency (FHFA) increased annual loan limits by 7.42 percent for Calendar Year (CY) 2021 based on changes to the national median home prices. Therefore, FHA's “floor” and “ceiling” loan limits will increase from $331,760 and $765,600 in CY 2020, to $356,362 and $822,375¹, respectively, for a one-unit property.

The following table lists the CY 2021 FHA loan limit thresholds for low cost and high cost areas:

As in previous years, Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a higher limit “ceiling” than the rest of the country.

Mortgagees may view the list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” — along with lists that can be sorted by state, county or MSA or by calendar year — on the Maximum Mortgage Limits web page.
Calendar Year 2021 loan limits for FHA-insured Title II forward mortgages will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

¹Alaska, Hawaii, Guam and the U.S. Virgin Islands are subject to a higher “ceiling.” See Mortgagee Letter for details.

2021 Nationwide Home Equity Conversion Mortgage (HECM) Limits

December 2, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2020-42, 2021 Nationwide Home Equity Conversion Mortgage (HECM) Limits, which provides the Calendar Year (CY) 2021 maximum claim amount for FHA- insured traditional HECM, HECM for purchase, and HECM-to-HECM refinances.

The maximum claim amount for FHA-insured HECMs for all areas, including Alaska, Hawaii, Guam, and the U.S. Virgin Islands, in CY 2021, will be $822,375; 150 percent of the Federal Home Loan Mortgage Corporation's (Freddie Mac) national conforming limit of $510,400. This limit is applicable for case numbers assigned on or after January 1, 2021, through December 31, 2021. For additional details, refer to Mortgagee Letter 2020-42.

The maximum CY 2021 claim amount for FHA-insured HECMs will be included in a future Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1) release.

FHA INFO 2020-88 - New Resources from the CFPB and HUD for Struggling Homeowners

November 27, 2020 - The Consumer Financial Protection Bureau (CFPB), U.S. Department of Housing and Urban Development (HUD), along with other federal agencies, are partnering to encourage homeowners – who are struggling financially as a result of the COVID-19 National Emergency - to take control of their mortgage loans.

It is more important than ever to make extra efforts to reach these struggling homeowners, help them understand their options, and navigate their choices. The CFPB has created resources to support your customers and clients.

To access the CFPB's online toolkit, visit: https://www.consumerfinance.gov/about-us/blog/how-help-homeowners-protect-their-homes

Extension of Temporary Guidance on the Endorsement of Mortgages under Forbearance

November 27, 2020 - Today, the Federal Housing Administration(FHA) published Mortgagee Letter (ML) 2020-39, Extension of Temporary Guidance for Endorsement of Mortgages under Forbearance for Borrowers Affected by the Presidentially-Declared COVID- 19 National Emergency consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

This ML further extends the period for mortgage forbearance provisions provided under the CARES Act, as announced in ML 2020-16 on June 4, 2020. More specifically, ML 2020-39 allows mortgages to be endorsed for insurance when the borrower, after closing, has requested a forbearance due to the COVID-19 National Emergency.

Mortgagees may use the guidance in this ML immediately for pending endorsements through December 31, 2020.

Extension of Effective Dates for Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account

November 27, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-40, Extension of the End Date for COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account.

This ML extends the effective dates published in ML 2020-24 on July 29, 2020, which allows industry partners to utilize flexible guidance on several FHA single family programs affected by the COVID-19 National Emergency.

Beginning immediately, the effective date is extended for the verification of business operations of self -employed borrowers and rental income guidance for case numbers assigned on or before December 31, 2020. Additionally, the guidance for the administration of the 203(k) Rehabilitation Escrow for borrowers in forbearance is extended through December 31, 2020.

FHA INFO 2020-87 - Private Flood Insurance Proposed Rule Published in Federal Register and Open for Public Comment

November 23, 2020 - Today, the Federal Housing Administration (FHA) published a proposed rule in the Federal Register (FR), Acceptance of Private Flood Insurance for Federal Housing Administration (FHA)-Insured Mortgages (Docket No. FR-6084-P-01). Initially announced in FHA INFO 20-83 and posted on the Single Family Housing Drafting Table, the proposed rule will provide the option for private flood insurance on FHA-insured single family mortgaged properties located in Special Flood Hazard Areas.

The proposed rule amends FHA regulations to allow borrowers the option to purchase private flood insurance to satisfy the mandatory flood insurance requirement of the Flood Disaster Protection Act of 1973 (FDPA). Additionally, it promotes consistency with industry standards and reduces the regulatory restrictions on flood insurance for FHA - insured single family loans.

Interested stakeholders are encouraged to review and provide comments on the private flood insurance proposed rule in a timely manner. Comments must be submitted using the methods outlined in the Federal Register posting not later than January 22, 2021.

FHA INFO 2020-86 - FHA Catalyst: Claims Module Implementation of Additional Claim Types and Phased Removal of Social Security Numbers for Claim Submissions

November 19, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-38, FHA Catalyst: Claims Module - Expanded Functionality for Conveyance, Single Family Loan Sales, Claims Without Conveyance of Title, and Pre- Foreclosure Sale Claims - and Phased Removal of Social Security Number Collection for Claim Submissions. This ML announces expanded capabilities within FHA Catalyst, providing mortgagees with new claim submission functionality through the platform. This expanded capability is part of FHA's continuing efforts to improve and standardize processes for its stakeholders.

Mortgagees can electronically submit all parts of the Single-Family Application for Insurance Benefits Form HUD-27011 using the FHA Catalyst: Claims Module for the following claim types on the dates noted below.

• Conveyance Claims, through foreclosure or Deed-In-Lieu of Foreclosure, (Claim Type 01) are effective November 19, 2020.
• Hawaiian Home Land Mortgages (Section 247 Mortgages) claims (Claim Type 02), Insured Mortgages on Indian Land (Section 248 Mortgages) claims (Claim Type 02), Single Family Loan Sale claims (Claim Type 02), Claims Without Conveyance of Title (CWCOT) (Claim Type 06), and Pre-Foreclosure Sale (PFS) claims (Claim Type 07) are effective December 15, 2020.

FHA is also phasing out collection of the borrower's Social Security Number (SSN) as part of the claim submission process. Beginning November 19, 2020, mortgagees who submit claims via the FHA Catalyst platform will not be required to submit the borrower's SSN with those claims. Beginning June 30, 2021, mortgagees will not be required to submit the borrower's SSN with any claims, regardless of the claims submission method.

Additionally, these policies will be incorporated into applicable sections of the Single Family Housing Policy Handbook 4000.1 . Stakeholders are encouraged to read the ML in its entirety for further guidance.

The FHA Catalyst: Claims Module is available upon request only. To gain access, mortgagees should contact the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2020-85 - Updates to FHA Single Family Housing Policy Handbook 4000.1 Incorporate Previously Issued Policy and Other Revisions

November 18, 2020 - Today, the Federal Housing Administration (FHA) published an update to Single Family Housing Policy Handbook 4000.1 (SF Handbook). This update includes revisions and additional clarifications to various FHA policies and programs throughout the SF Handbook since its last update on January 2, 2020, as well as the incorporation of changes previously announced in the Mortgagee Letters included in the Handbook Transmittal, which can be found on the Housing Handbooks page on hud.gov.

FHA encourages Mortgagees and other interested stakeholders in FHA transactions to review and familiarize themselves with the changes in this update as outlined in the Handbook Transmittal. Additionally, a separate redline version of the SF Handbook has been posted on its Handbook Information Page.

As a quick reference, following are some Key Changes included in each Handbook section:

Section I — Doing Business with FHA

• Clarification of the application and eligibility financial requirement for the covered audit period by stating a Mortgagee's audited financial statements must cover the most recent fiscal year. For companies operating fewer than 12 months, the audited financial statements must cover all months of operation.
• Clarification and alignment with 24 C.F.R. § 202.5(m)(1) of the Post-Approval reporting requirement for a Mortgagee that experiences an operating loss of 20 percent or greater of its net worth.
• Clarification of the notification requirements for a Mortgagee that ceases operations to submit a change request in the Lender Electronic Assessment Portal (LEAP) for voluntary withdrawal of FHA approval.

Section II — Origination Through Post-Closing/Endorsement

• Clarification of the definition of an Accessory Dwelling Unit (ADU) located on a single family residential property. A one-unit property with an ADU will be treated as a one-unit property; however, an ADU located on any property with two or more units must be considered as an additional unit.
• Instructions for addressing situations where, during the application process, it is discovered that an existing debt or obligation secured by a Mortgage is not listed on the credit report and not considered by the Automated Underwriting System (AUS).
• Adding Form HUD-9991 and other Required Condominium Documents to the Case Binder Stacking Order.

Section III — Servicing and Loss Mitigation

• Incorporation of guidance on enhancements to FHA's Claims Without Conveyance of Title (CWCOT) Procedures
• Incorporation of guidance on Loss Mitigation Options for Borrowers affected by the COVID-19 National Emergency.

Section IV — Claims and Disposition

• Incorporation of guidance on use of FHA Catalyst for Supplemental, Loss Mitigation Home Retention, and Reconveyance claims submissions.

Section V — Quality Control, Oversight and Compliance

• Clarification of the existing requirement for conducting field reviews of appraisals on early payment default (EPD) mortgages by requiring Mortgagees to perform field reviews on all (100 percent) of the EPDs underwritten by the Mortgagee.
• Incorporation of FHA's Defect Taxonomy Appendix 7.0 into the Title II Loan Review section of Mortgagee

Monitoring.

The effective dates for the various SF Handbook sections are as follows:

• SF Handbook changes that are incorporated to reflect a ML (as identified in Section II of the Transmittal) have an effective date as previously announced in the respective ML. Changes identified in Sections I.A, V.A, and V.E.4.b must be implemented immediately.
• Changes identified in Section II.A may be implemented immediately; however, implementation is mandatory for mortgages with case numbers assigned on or after February 16, 2021.
• All other changes may be implemented immediately; however, implementation is mandatory not later than February 16, 2021.

As mentioned, all interested parties in FHA transactions are strongly encouraged to familiarize themselves with the policy and program updates and clarifications as outlined in the PDF version of SF Handbook that published today. The online version of the SF Handbook is currently being updated and will be available soon.

FHA INFO 2020-84 - Fiscal Year 2020 FHA Annual Report to Congress Released Today

November 13, 2020 - Today, the Department of Housing and Urban Development (HUD) released its Federal Housing Administration (FHA) Annual Report to Congress on the financial status of FHA's Mutual Mortgage Insurance (MMI) Fund for fiscal year (FY) 2020.

As detailed in the report:

• The MMI Fund capital ratio for FY 2020 was 6.10 percent, an increase of 1.26 percentage points from the combined capital ratio of 4.84 percent in FY 2019.
• FHA had insurance-in-force on single family forward and Home Equity Conversion Mortgages (HECM) with a total unpaid principal balance of more than $1.29 trillion as of September 30, 2020.
• The performance of the forward book of business posted a stand-alone capital ratio of 6.31 percent, an increase of 0.87 percentage points from 5.44 percent in FY 2019.
• While improved over FY 2019, the HECM reverse mortgage portfolio continues to show a negative stand -alone capital ratio, improving to negative (-) 0.78 percent in FY 2020 from negative (-) 9.22 percent in FY 2019.

FHA INFO 2020-83 - FHA Posts Private Flood Insurance Proposed Rule on FHA’s Single Family Housing Drafting Table

November 10, 2020 - Today, the Federal Housing Administration (FHA) posted on the FHA Single Family Housing Drafting Table its proposed rule, Acceptance of Private Flood Insurance for Federal Housing Administration (FHA)-Insured Mortgages (Docket No. FR- 6084-P-01), which will be published in the Federal Register at a future date. The proposed rule would — for the first time — allow the option for private flood insurance on FHA-insured properties located in Special Flood Hazard Areas (SFHAs). The proposed rule can be viewed on FHA's Single Family Housing Drafting Table (SF Drafting Table). Interested stakeholders will have 60 days to provide comment using the methods specified in the proposed rule once it is published in the Federal Register.

FHA's private flood insurance proposed rule would amend current FHA regulations to allow borrowers the option to purchase private flood insurance to satisfy the mandatory flood insurance requirement of the Flood Disaster Protection Act of 1973 (FDPA). Furthermore, FHA's proposed rule would promote consistency with industry standards and reduce the regulatory restrictions on flood insurance for FHA-insured loans.

FHA recognizes the value of consistency across the housing market with respect to private flood insurance now that Federal regulators have published a final rule on private flood insurance acceptance. However, its proposed rule varies from the Federal regulators' final rule on private flood insurance acceptance in several areas to ensure borrowers and the Mutual Mortgage Insurance Fund are best protected.

To ensure mortgagees and other interested stakeholders are prepared to provide comments at the appropriate time, FHA encourages its stakeholders to review the Acceptance of Private Flood Insurance for Federal Housing Administration (FHA)-Insured Mortgages proposed rule on the SF Drafting Table.

Once the private flood insurance proposed rule publishes in the Federal Register, FHA will communicate to stakeholders that the 60-day comment period has commenced and encourage them to submit their comments using the instructions outlined in the Federal Register posting.

FHA INFO 2020-81 - New Resources for FHA Catalyst: Single Family Origination Module – Automated Underwriting System Users

November 2, 2020 - The FHA Catalyst: Single Family Origination Module - Automated Underwriting System (AUS) is now available and may be used by mortgagees with loan origination systems (LOS) that are integrated within FHA Catalyst. This module was initially announced in Mortgagee Letter (ML) 20-35 and is the first mortgage origination capability within the FHA Catalyst platform.

To assist users, the Federal Housing Administration (FHA) released the FHA Catalyst: Single Family Loan Origination Module - Lender User Guide today. The guide supports mortgagees who will utilize the FHA Catalyst platform as an alternative AUS for Uniform Loan Application Dataset (ULAD) data submissions to receive TOTAL (Technology Open to Approved Lenders) Mortgage Scorecard risk assessments directly from FHA.

In addition, the FHA Catalyst: Single Family Loan Origination Developer Guide — which provides instructions for connecting to the module - was recently updated and may be requested from the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342).

Stakeholders can view the FHA Catalyst: Single Family Loan Origination Module - Lender User Guide and other resources on the FHA Catalyst: Single Family Origination Module web page.

FHA INFO 2020-80 - Temporary Partial Waivers of Certain HECM Policies Due to the COVID-19 National Emergency

October 30, 2020 - Today, the Federal Housing Administration (FHA) issued two temporary partial waivers to its HECM policies that allow mortgagees to be more flexible in submitting HECM Assignment Claims without borrower signatures and in reviewing borrowers for subsequent repayment plans for unpaid property charges, regardless of the total outstanding arrearage.

Waiver of Borrower Signature Requirement for HECM Assignment Claims

This temporary partial waiver of HECM claim assignments policy from Mortgagee Letter (ML) 2017-05 allows mortgagees to submit an Assignment Claim without having to obtain a signature from the HECM borrower on an occupancy certification. Mortgagees are required, however, to continue to obtain annual occupancy certifications from HECM borrowers.

The requirement to obtain a signed annual occupancy certification is being temporarily waived due to difficulties some HECM borrowers may be experiencing in receiving and sending mail and other correspondence due to COVID-19-related difficulties. This temporary waiver is effective through December 31, 2020.

Waiver of Maximum Arrearage for Subsequent HECM Property Charge Repayment Plan

FHA also issued a temporary partial waiver of policy originally introduced in ML 2015-11. Today's partial waiver builds on the previous HECM COVID-19 repayment waiver, dated April 14, 2020, that expires on October 30, 2020.

It gives mortgagees authority to offer HECM borrowers a repayment plan for unpaid property charges — regardless of the total outstanding arrearage — by waiving certain requirements outlined in ML 2015-11, and allowing them to repay property tax arrearages of any amount if they are unable to make two consecutive payments during the COVID-19 National Emergency. This temporary partial waiver is also effective through December 31, 2020.

FHA INFO 2020-79 - Extension of Re-verification of Employment Guidance and Updated Appraisal Scope of Work Option Extended to December 31, 2020

October 28, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-37, Extension of Re-verification of Employment Guidance and Updated Appraisal Scope of Work Option for Federal Housing Administration (FHA) Single Family Programs Impacted by the Coronavirus Disease of 2019 (COVID-19).

Today's ML further extends the re-verification of employment guidance initially announced in ML 2020-05. It also extends the appraisal scope of work inspection option providing for Exterior-Only appraisals that limit in-person contact for certain transactions affected by the COVID-19 National Emergency. The Desktop-Only appraisal scope of work option originally announced in ML 2020-05 and last extended in ML 2020-28, is not being extended and will expire on October 31, 2020. It has been determined that with the effectiveness of the Exterior-Only option, provided in ML 2020-05, for certain purchase transactions without any Appraiser visual observation of the property, is no longer necessary.

The re-verification of employment guidance is effective immediately for cases closed on or before December 31, 2020. The updated appraisal guidance is effective November 1, 2020. It is applicable to appraisals with an effective date on or before December 31, 2020.

FHA INFO 2020-77 - FHA Updates New Construction Financing Requirements

October 22, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-36, FHA New Construction Requirements. This guidance updates the requirements for New Construction financing for Title II Single Family forward mortgages in alignment with the regulatory amendments announced in the 2018 Final Rules that streamlined inspection and warranty requirements.

Changes to HUD's maximum financing policy for New Construction include:

1. Eliminating Early Start Letter and Pre-Approval requirements;
2. Consolidating requirements regardless of loan-to-value (LTV);
3. Adding Form HUD-92544, Warranty of Completion of Construction, for all New Construction;
4. Providing alternative inspections by a third party, that is a registered architect or structural engineer, in the absence of International Code Council (ICC) certified Residential Combination Inspector (RCI) or Combination Inspector (CI); and
5. Updating when Form HUD-NPMA-99-B, New Construction Subterranean Termite Service Record is required, to align it with the four acceptable termite treatment applications reflected on the related Form HUD-NPMA-99-A, Subterranean Termite Protection Builder's Guarantee.

This guidance may be used immediately for existing cases and must be used for FHA case numbers assigned on or after January 4, 2021.

All policy updates will be incorporated into a forthcoming revision of the Single Family Housing Policy Handbook 4000.1.

FHA INFO 2020-76 - FHA Introduces First Automated Underwriting System with FHA Catalyst: Single Family Origination Module Launch

October 21, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-35, FHA Catalyst: Single Family Origination Module – Automated Underwriting System(AUS). This ML announced the first FHA-specific automated underwriting system, which is now available on the new FHA Catalyst: Single Family Loan Origination Module. The functionality allows mortgagees' loan origination systems (LOS) to be integrated within FHA Catalyst. The Single Family Origination Module - AUS, the first mortgage origination capability within the FHA Catalyst platform, allows mortgagees to submit borrower loan application data and receive TOTAL Mortgage Scorecard risk assessments directly from FHA.

Beginning October 30, 2020, mortgagees who have built an interface between their LOS and FHA Catalyst may use the FHA Catalyst: Single Family Origination Module - AUS for Title II forward mortgage programs.

The module serves as an alternative AUS for Uniform Loan Application Dataset (ULAD) data submissions that FHA Catalyst will utilize to score loan applications against FHA's Technology Open to Approved Lenders (TOTAL) Mortgage Scorecard. Mortgagees may complete loan applications in their LOS and submit through FHA Catalyst, which will capture the ULAD and credit report information. Subsequently, loans will be scored using the TOTAL Mortgage Scorecard and mortgagees will receive scoring decisions and feedback certificates.

For instructions on how mortgagees' LOS vendors can connect to the module, stakeholders should request the FHA Catalyst: Single Family Origination - AUS Integration Guide from the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342). In addition, stakeholders can access the FHA Catalyst: Single Family Origination Module web page for more information.

Mortgagees are not required to utilize FHA Catalyst: Single Family Origination Module - AUS at this time and may continue to use their existing AUS pathways for TOTAL Mortgage Scorecard submissions. Additional modules designed to support the loan origination process are in progress.

FHA INFO 2020-75 - Updates to the Effective Date of Initial COVID-19 Forbearance Requests and Home Equity Conversion Mortgage (HECM) Extension Period

October 20, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-34, Update to the Date for Approving a COVID-19 Forbearance or COVID-19 Home Equity Conversion Mortgage (HECM) Extension. This ML extends the date from October 30, 2020 to December 31, 2020, for when a borrower may request an initial six -month COVID-19 forbearance or make the initial request for an extension to a HECM due and payable period. This guidance was first announced in ML 2020-06 on April 1, 2020.

FHA recognizes the continuing nature of the COVID-19 National Emergency and implemented the December 31, 2020, date to provide impacted borrowers with additional time to request a COVID-19 forbearance or HECM extension. The maximum timeframe for a COVID-19 Forbearance is still 12 months.

For further guidance, servicers should reference the COVID-19 Forbearance established in ML 2020-06 and ML 2020-22. Servicers are encouraged to read those MLs in their entirety as the requirements, aside from the revised deadlines, remain unchanged.

FHA INFO 2020-73 - FHA Issues Temporary Policy to Waive Requirements for "Interior" Photographs in Presidentially-Declared Major Disaster Areas

October 6, 2020 - Today, the Federal Housing Administration (FHA) published a temporary policy waiver to its Single Family Housing Policy Handbook 4000.1 requirements that suspends the standard inspection requirement for “interior” photographs of property in designated Presidentially-Declared Major Disaster Areas (PDMDAs).

This waiver of requirements for interior photographs in PDMDAs is now consistent with the temporary inspection guidance allowing for exterior-only or desktop-only inspections due to the COVID-19 National Emergency currently in place.

FHA INFO 2020-72 - FHA Issues Temporary Waivers of its Deferral of Due and Payable Status for Eligible Non- Borrowing Spouses Impacted by the COVID-19 National Emergency

October 1, 2020 - Eligible Home Equity Conversion Mortgage (HECM) Non-Borrowing Spouses (NBS) currently have 90 days after the death of the last surviving HECM borrower to establish legal ownership or other ongoing legal right to remain in the property. Today, the Federal Housing Administration (FHA) issued a temporary partial waiver and corresponding housing directive waiver of that requirement in the superseded Mortgagee Letter (ML) 2014-07 and subsequent ML 2015-02 due to continued COVID-19 National Emergency concerns.

FHA recognizes the National Emergency declaration and resulting closures of courthouses, government offices, and other businesses may make it difficult for an eligible NBS to obtain the needed documents to establish legal ownership or legal right to remain in the property securing the HECM. FHA issued this partial waiver — which allows an eligible NBS to enter into a deferral period and avoid foreclosure if they are unable to meet the 90-day requirement because of circumstances beyond their control that are related to the COVID-19 National Emergency. The temporary partial 90-day Right to Remain waiver is limited to a 12-month period from the date of issuance.

FHA INFO 2020-71 - FHA Catalyst: Claims Module Now Includes Reacquisition Claims Submission Functionality

September 28, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-32, FHA Catalyst: Claims Module - Expanded Functionality for Reacquisition Claims. This ML announces additional functionality within FHA Catalyst, enabling mortgagees to electronically submit reacquisition claims for FHA benefits. Implementing this new feature is part of FHA's ongoing efforts to provide digital solutions, improve efficiency, and standardize processes for stakeholders through the FHA Catalyst platform.

As of September 28, 2020, mortgagees may use this submission method for reacquisition claims in the FHA Catalyst: Claims Module. Stakeholders are encouraged to utilize the module as an alternative to submitting reacquisition claims by the traditional paper method; however, mortgagees can continue to submit paper claims in accordance with FHA's existing standards and requirements. Module details will be incorporated in an upcoming Single Family Housing Policy Handbook 4000.1 update.

To access the module or receive guidance on its use, mortgagees should contact the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342). Additionally, stakeholders can view the FHA Catalyst: Claims Module User Guide and pre-recorded webinar for more information.

FHA INFO 2020-69 - New FHA Defect Taxonomy Appendix 7.0 to Single Family Housing Policy Handbook

September 22, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-31, Federal Housing Administration (FHA) Defect Taxonomy Appendix to Handbook 4000.1, which announced the incorporation of Appendix 7.0 - FHA Defect Taxonomy to the Single Family Housing Policy Handbook 4000.1.

Beginning immediately, FHA will reference Appendix 7.0 - FHA Defect Taxonomy for loan reviews. The appendix is currently accessible on the Loan Review System web page. Mortgagees should note that the use and maintenance of the FHA Defect Taxonomy in any previous document format has been discontinued. The appendix will be included in a future Single Family Housing Policy Handbook update.

Appendix 7.0 – FHA Defect Taxonomy includes the content implemented with Version 2 of the FHA Defect Taxonomy, which became effective for Title II loan reviews as of January 1, 2020.

FHA INFO 2020-67 - Home Equity Reverse Mortgage Information Technology (HERMIT) System Update

September 16, 2020 - Today, the Federal Housing Administration (FHA) announced updates to the Home Equity Reverse Mortgage Information Technology (HERMIT) system's file format and layout. The changes are scheduled to be implemented on September 26, 2020, to improve the reporting of Home Equity Conversion Mortgage (HECM) terminations. HERMIT software updates related to HECM submission extensions related to the Presidentially-Declared COVID-19 National Emergency were posted in FHA INFO 20-66 on September 10, 2020.

Servicers should reference the HERMIT System & Resources page for more information on these changes. In addition, questions regarding HERMIT can be sent by email to: ServicingSupport@hermitsp.com.

FHA INFO 2020-66 - FHA Underwriting Guidelines for Borrowers with Previous Mortgage Payment Forbearance

September 10, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-30, FHA Underwriting Guidelines for Borrowers with Previous Mortgage Payment Forbearance. The ML informs mortgagees of underwriting guidelines for homeowners who were granted a mortgage forbearance due to the COVID-19 National Emergency.

Additionally, this ML defines the requirements that borrowers must meet to request a new FHA -insured mortgage after successfully completing their mortgage payment forbearance period.

Borrowers granted mortgage payment forbearance may be eligible for a new FHA-insured mortgage provided they:

• continued to make regularly scheduled mortgage payments and the forbearance is terminated; or
• completed forbearance and made at least 12 consecutive monthly mortgage payments after forbearance or cash-out refinances; or
• completed forbearance and made at least three consecutive monthly mortgage payments after forbearance for purchase mortgages and no cash-out refinances; or
• completed forbearance and made less than three consecutive monthly mortgage payments after forbearance for credit qualifying streamline refinances.

Additionally, if a borrower entered into a modification agreement on an FHA mortgage, they must have made six payments under the modification to be eligible for a streamline refinance.

This guidance applies to single family forward mortgage programs only and updates requirements in the Single Family Housing Policy Handbook 4000.1 (SF Handbook) as indicated in the ML. These updates will be incorporated into the applicable sections of the SF Handbook in the coming months.

Home Equity Reverse Mortgage Information Technology (HERMIT) System Submissions for COVID-19 Related Extensions

September 10, 2020 - Today, the Federal Housing Administration (FHA) announced software updates to the Home Equity Reverse Mortgage Information Technology (HERMIT) system, which allows servicers to submit extensions related to the Presidentially - Declared COVID-19 National Emergency for Home Equity Conversion Mortgages (HECM). The extension of the foreclosure and eviction moratorium were published in Mortgagee Letter 2020-27.

Servicers are required to use the COVID-19 extensions for HECMs per the details in HERMIT System Changes - Release 6.1 immediately. In addition, stakeholders should review the HERMIT User Guide and the HERMIT System & Resources for more information.

FHA INFO 2020-64 - Guidance for FHA-Approved Mortgagees and Servicers Regarding Presidentially-Declared Major Disaster Areas during the COVID-19 Pandemic

September 2, 2020 - Today, the Federal Housing Administration (FHA) is issuing this clarification to mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages in locations in the U.S. and its territories when the President declares a major disaster area during the COVID-19 pandemic. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. FHA recognizes the difficulty facing many borrowers across the country in light of recent hurricanes, wildfires, and other extreme weather events in the midst of a pandemic. This guidance is intended to provide clarity to borrowers and industry partners.

To date, the President has declared a major disaster in every state and most territories in connection with COVID-19. The following guidance applies to all areas covered by an additional Presidentially-Declared Major Disaster Area (PDMDA) during the COVID-19 pandemic.

• This guidance does not pertain to the loss mitigation options for PDMDAs declared as a result of COVID-19 National Emergency, which are addressed in Mortgagee Letters 2020-06 and 2020-22.
• For FHA-insured forward mortgages secured by properties in a PDMDA:
  • FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster declaration.
  • In PDMDAs, FHA provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence a foreclosure action or evaluate the borrower under HUD's Loss Mitigation Program.
  • For borrowers who are already on a COVID-19 Loss Mitigation Option — including a forbearance — before the date of the PDMDA, mortgagees must continue to follow the loss mitigation guidance in ML 2020-22: FHA's COVID-19 Loss Mitigation Options.
    • For all other borrowers, the mortgagee must evaluate the borrower for all loss mitigation options available to them, including any PDMDA or COVID-19 Loss Mitigation Options, as applicable, based on their reason for hardship.
  • For any buildings in a PDMDA that are substantially damaged, mortgagees must follow the guidance in Single Family Housing Policy Handbook 4000.1 (SF Handbook) Section III.A.3.c.iii, Monitoring of Repairs to Substantially Damaged Homes. This requirement applies to all properties covered by an additional non- COVID-19 Presidentially-Declared Major Disaster Area during the COVID-19 pandemic, including those already under a COVID-19 Loss Mitigation Option, such as forbearance.
  • Mortgagees are reminded that they must report the appropriate default status codes associated with the actions taking place.
    • Default Status Code 34 must be reported when the property is in a PDMDA and/or if the borrower has been impacted until another code applies, such as loss mitigation, or until it is determined that the borrower and/or property was not impacted by the disaster. Default Reason Code 019 must be reported to indicate that the borrower's ability to make on time mortgage payments has been impacted by property damage.
    • Default Reason Code 055 must be reported for COVID-19 Loss Mitigation. If the property is also located in a PDMDA, the PDMDA must be noted in the Servicing File.
• FHA-insured Home Equity Conversion Mortgages (HECM) that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day extension of HECM foreclosure timelines, as most recently provided for in FHA INFO 18-40.
• In addition to the provisions found in FHA INFO 18-40, FHA is providing HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure expiration date to commence or recommence a foreclosure action.

Mortgagees are reminded that they should begin reaching out to affected borrowers who may require loss mitigation assistance as soon as possible post-disaster.

In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review:

• FHA's 203(h) Mortgage Insurance for Disaster Victims requirements in Section II.A.8.b of the SF Handbook. The 203(h) program allows FHA to insure mortgages for victims of a major disaster who have lost their homes and are in the process of rebuilding or buying another home.
• FHA's 203(k) Rehabilitation Mortgage Insurance Program requirements in Section II.A.8.a of the SF Handbook. The 203(k) program provides mortgage financing or refinancing which includes the cost of home repairs – both structural and non-structural - into the loan amount.

Mortgagees can find more information about the policies referenced above and other FHA PDMDA and FHA COVID -19 policies on the FHA Resource Center's Online Knowledge Base.

New and Updated FHA Catalyst Resources Available

September 2, 2020 - Today, the Federal Housing Administration (FHA) is announcing additional user and training resources for the FHA Catalyst platform. The materials are designed to support users of the FHA Catalyst modules below.

FHA Catalyst: Case Binder Module

Introduced in Mortgagee Letter (ML) 2020-07, this module enables lenders to electronically submit case binder documents as an alternative to mailing paper binders. Additional functionality and updated requirements for the electronic submission of case binders selected for post-endorsement reviews using the module was announced in ML 2020-29. Mortgagees are encouraged to view the updated FHA Catalyst: Case Binder Module User Guide, pre-recorded webinar, and module information.

FHA Catalyst: Claims Module

The module allows for digital submissions of loss mitigation home retention claims and supplemental claims for single family forward mortgages and was announced in ML 2020-18. Servicers may view the updated FHA Catalyst: Claims Module Single Family Forward Claims User Guide and module information.

FHA Catalyst: Property Valuation Module

FHA Catalyst: Property Valuation Module User Guides provide detailed instructions for navigating the new Property Valuation Module, including log in support and step-by-step instructions for submitting appraisals. For more information, mortgagees should access the Lender User Guide and the Lender Administrator User Guide.

FHA Catalyst: Electronic Appraisal Delivery Module

Mortgagees may submit appraisals for single family forward mortgage insurance endorsements through this module beginning September 1, 2020, as announced in ML 2020-26. Mortgagees are encouraged to access the FHA Appraisal Report and Data Delivery Guide.

Support for FHA Catalyst Users

To access these modules within the FHA Catalyst platform, interested parties should contact the FHA Resource Center via email at: answers@hud.gov or by phone at: 1-800-CALL-FHA (1-800-225-5342).

FHA INFO 2020-63 - FHA Catalyst: Case Binder Module Now Includes Submissions for Post-Endorsement Reviews

August 31, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-29, FHA Catalyst: Case Binder Module – Expanded Functionality and Updated Case Binder Submission Requirements for Federal Housing Administration (FHA) Post-Endorsement Loan Reviews. This ML announces additional functionality and updated requirements for the electronic submission of case binders selected for post-endorsement review using the FHA Catalyst: Case Binder Module.

Effective September 14, mortgagees not approved for electronic Case Binder (eCB) submission through FHA Connection (FHAC) are required to use the Case Binder module to submit single family forward and Home Equity Conversion Mortgage case binders that FHA requests for review in the Loan Review System.

Mortgagees approved for eCB submission must continue to submit case binders through FHA Connection.

To access the module or receive guidance on its use, mortgagees should contact the FHA Resource Center by email at: answers@hud.gov or call: 1-800-CALL-FHA (1-800-225-5342). In addition, stakeholders can access the FHA Catalyst: Case Binder Module User Guide and pre-recorded webinar for more information.

FHA INFO 2020-62 - Re-verification of Employment and Exterior-Only and Desktop-Only Appraisal Policies Extended to October 31, 2020

August 28, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-28, Re-Extension of the Effective Date of Mortgagee Letter (ML) 2020-05, Re-verification of Employment and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for the Federal Housing Administration (FHA) Single Family programs impacted by the Coronavirus Disease of 2019 (COVID-19).

Today's ML extends for the third time the flexible alternatives for industry partners that must re -verify a borrower's employment and/or conduct appraisal inspections while observing prudent social distancing practices associated with the COVID-19 National Emergency.

As outlined, FHA's extension of the re-verification of employment guidance is effective immediately for cases closed on or before October 31, 2020. It is also effective immediately for appraisal effective dates on or before October 31, 2020.

Temporary Partial Waiver of QC Requirements for Early Payment Defaults

August 28, 2020 - Today, FHA issued a temporary partial waiver of Single Family Housing Policy Handbook 4000.1 (SF Handbook) to provide mortgagees with flexibility related to quality control (QC) reviews of Early Payment Defaults (EPD).

As a result of the COVID-19 National Emergency, FHA continues to observe an elevated number of EPDs nationwide. According to SF Handbook guidance, mortgagees are required to conduct monthly QC reviews of all EPDs. However, many recent EPDs have been reported to FHA using the Single Family Default Monitoring System (SFDMS) Delinquency and Default Reason Code 055 - Related to National Emergency Declaration, which indicates the mortgagee granted forbearance relief under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). In response, FHA is temporarily partially waiving the requirements found in the SF Handbook, Sections V.A.3.a.i(C), V.A.3.a.iv(B)(2) and V.A.3.c.ii(C)(1)(b).

With this waiver, mortgagees are not required to conduct QC reviews — including field reviews of appraisals — for EPDs that would have been selected as part of the mortgagee's August 2020 QC selections, provided the mortgages have been reported using SFDMS Delinquency and Default Reason Code 055.

Mortgagees must review all EPDs not reported using SFDMS Delinquency and Default Reason Code 055 that would have been included in their August QC selections, and must continue to meet all other QC requirements in SF Handbook, Section V.A.3.

FHA encourages mortgagees to apply these QC flexibilities only to the extent necessary.

FHA INFO 2020-61 - FHA's Foreclosure and Eviction Moratorium Extended Through December 31, 2020

August 27, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-27, Extension of Foreclosure and Eviction Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency. This ML announces a third extension of the foreclosure and eviction moratorium through December 31, 2020.

This moratorium extension is effective immediately upon the expiration of the existing moratorium announced in ML 2020-19. This guidance is applicable to all FHA Title II single family forward mortgage and Home Equity Conversion Mortgage (reverse) programs, except for those secured by vacant and/or abandoned properties.

FHA INFO 2020-59 - Launch of FHA Catalyst: Electronic Appraisal Delivery Module

August 18, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-26, FHA Catalyst: Electronic Appraisal Delivery (EAD) Module. This ML announces the launch of a new EAD module on the FHA Catalyst platform that allows mortgagees to electronically submit appraisals for forward mortgage transactions. As part of FHA's ongoing information technology modernization initiative, the EAD module is the first of several planned FHA Catalyst modules available for lenders to use when originating forward mortgages intended for FHA insurance endorsement.

The EAD module in FHA Catalyst supports the existing appraisal reporting forms and appraisal protocols. Beginning September 1, 2020, mortgagees may begin submitting appraisals for single family forward mortgage insurance endorsements through the EAD module.

In preparation for the module's use date, mortgagees are encouraged to:

• Contact the FHA Resource Center via email at answers@hud.gov or by phone at 1-800-CALL FHA (1-800-225- 5342) to request access to the EAD module in FHA Catalyst;
• Ensure designated third-party service vendors (e.g., appraisal management companies, appraisal delivery systems, etc.) are readying for technology system integrations, as required; and
• Start delivering appraisal submissions for forward mortgages through the EAD module in FHA Catalyst as early as September 1, 2020.

Mortgagees or designated third-party service vendors will be able to request access to the technology integration specifications for the module in the coming weeks. To support the transition to the module, a user guide and a pre- recorded webinar will be available shortly. Additional details regarding the technology and integration specifications, training resources, and the module's mandatory use date will be communicated in an upcoming FHA INFO.

FHA plans to expand the EAD module to include Home Equity Conversion Mortgage appraisal submissions in the future.

FHA INFO 2020-57 - Extension of Maximum Claim Period for Title I Loans and Reminder of Available Loss Mitigation Options

August 11, 2020 - Today, the Federal Housing Administration (FHA) published Title I Letter-487, COVID-19 Title I Loans: Extension of Maximum Claim Periods and Reminder of Available Loss Mitigation Options for Borrowers affected by COVID-19.

The purpose of this Letter is to provide Title I lenders with an optional extension to the maximum claim period of up to six months so that lenders have additional time to engage in loss mitigation efforts to assist borrowers affected by the COVID-19 National Emergency declaration. Additionally, this Letter reminds Title I lenders of their obligation to contact borrowers to discuss their reasons for default, explore a cure, and describes the loss mitigation options available for Title I loans.

The optional claims filing extension is available immediately for claims of loans that were current or less than 30 days past due as of March 1, 2020, and have subsequently gone into default, provided the default occurred prior to November 30, 2020, for all Title I property improvement and manufactured home loans.

FHA INFO 2020-55 - 30-Day Notice for Condominium Project Approval Questionnaires Published in Federal Register and Posted on Single Family Housing Drafting Table

July 31, 2020 - Under the provisions of the Paperwork Reduction Act (PRA), the Federal Housing Administration (FHA), published Federal Register (FR) Notice, Project Approval for Single Family Condominiums (Docket No. FR-7024-N-30) on July 31, 2020.

This 30-day PRA notice includes comments received from the initial 60-day FR Notice published on January 31, 2020. This gives interested stakeholders another opportunity to provide public comment on the revision of data collection forms HUD-9991, FHA Condominium Loan Level/Single-Unit Approval Questionnaire, and HUD-9992, FHA Condominium Project Approval Questionnaire. These forms are necessary to determine eligibility status for FHA single-unit or condominium project approvals.

Interested parties wishing to review the two forms and the corresponding instructions for completing them, can do so by visiting the Single Family Housing Drafting Table. Additional comments on the forms will be accepted through the method outlined in the FR Notice not later than August 31, 2020.

FHA INFO 2020-54 - Revision of Effective Date for COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account

July 29, 2020 - Today, FHA issued Mortgagee Letter (ML) 2020-24, Revision of Effective Date for COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account. This ML supersedes ML 2020-23 announced in FHA INFO 20-53 on July 28, 2020. ML 2020-24 updates the effective date for the verification of business operations of self-employed borrowers and rental income guidance for case numbers assigned on or after August 12, 2020 through November 30, 2020.

The effective date for the 203(k) rehabilitation escrow account has not changed and is still effective as of July 28, 2020. The revised ML is now available on the Mortgagee Letters web page.

FHA INFO 2020-49 - LEAP Planned System Maintenance Notification - July 15, to July 20, 2020

July 10, 2020 - The Lender Electronic Assessment Portal (LEAP) is scheduled for planned system maintenance and will be unavailable from 5:00 PM (Eastern) on Wednesday, July 15, 2020, through 8:00 AM (Eastern) on Monday, July 20, 2020. As a result, lenders will be unable to submit Recertification Packages, Change Requests, Notices of Material Events, or edit institution data, including cash flow accounts and branches, on these dates. Normal operations are expected to resume on Monday, July 20th at approximately 8:00 AM (Eastern).

FHA INFO 2020-48 - FHA Expands COVID-19 Loss Mitigation Options for Borrowers

July 8, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-22, FHA's COVID-19 Loss Mitigation Options. This ML announces an expansion of loss mitigation options that are available to assist single family borrowers with FHA-insured forward mortgages impacted by the COVID-19 National Emergency. In addition, this ML updates the guidance for forward mortgages detailed in ML 2020-06.

The additional loss mitigation options available to borrowers, where the mortgage was current or less than 30 days past due as of March 1, 2020, are:

• COVID-19 Home Retention Options:
  • COVID-19 Owner-Occupant Loan Modification
  • COVID-19 Combination Partial Claim and Loan Modification
  • COVID-19 FHA-HAMP Combination Loan Modification and Partial Claim with Reduced Documentation
  • COVID-19 Non-Occupant Loan Modification
• COVID-19 Home Disposition Options:
  • COVID-19 Pre-Foreclosure Sales
  • COVID-19 Deed-In-Lieu of Foreclosure

Servicers must begin offering these loss mitigation options to eligible borrowers immediately, but no later than 90 days from the date in ML 2020-22. Additionally, any COVID-19-related delinquencies in the Single Family Default Monitoring System (SFDMS) must be reported by the July 2020 reporting cycle. Refer to the Single Family Default Monitoring System Codes Guide for more information. These policies will be incorporated in a forthcoming update to FHA's Single Family Housing Policy Handbook 4000.1, Section III.A.3.d, Presidentially-Declared COVID-19 National Emergency.

FHA will conduct a webinar that focuses on the COVID-19-related loss mitigation options available to assist borrowers. The same webinar will be offered on two different dates to maximize attendance. Details are included in the announcement below.

FHA INFO 2020-47 - Enhancements to FHA's Claims Without Conveyance of Title (CWCOT) Procedures

July 7, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-21, Enhancements to FHA's Claims Without Conveyance of Title (CWCOT) Procedures. The guidance in this ML enhances FHA's CWCOT procedures by:

• allowing a second appraisal upon vacancy for a property that had an exterior-only appraisal, where an interior appraisal could not be obtained;
• allowing mortgagees to submit eviction costs and certain eligible property preservation expenses incurred during post-foreclosure sales opportunities;
• updating the policy and allowable fee structure related to independent third-party providers that conduct foreclosure sales or post-foreclosure sales efforts under CWCOT procedures; and
• regularly updating discounts in FHA Connection (FHAC) and changing to tier-based pricing factors based on a property's location, occupancy status, and appraised value. After the property's appraised value has been established and the Commissioner's Adjusted Fair Market Value (CAFMV) has been determined, authorized mortgagees may access the CAFMV via the link in FHAC at: https://entp.hud.gov/clas/index.cfm.

Originally piloted in 2013, CWCOT is an FHA claim option through which insurance benefits are paid to a mortgagee after the sale of the property to a third-party purchaser at foreclosure of the FHA-insured mortgage or through post-foreclosure sales efforts. This means there is no conveyance of the property to the U.S. Department of Housing and Urban Development (HUD) in exchange for payment of the mortgage insurance benefit.

The enhancements announced in ML 2020-21 take into consideration the public feedback received earlier this year when the draft Mortgagee Letter was posted on the Single Family Housing Drafting Table. These enhancements make FHA's CWCOT program more viable for foreclosure sales associated with defaulted FHA-insured mortgages.

FHA INFO 2020-46 - Re-verification of Employment and Exterior-Only and Desktop-Only Appraisal Policies Extended to August 31, 2020

June 29, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-20, Extension of the Effective Date of Mortgagee Letter 2020-05, Re-verification of Employment and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted By COVID-19.

Today's ML extends for the second time the flexible alternatives for industry partners that must re-verify a borrower's employment and/or conduct appraisal reviews while observing prudent physically- distancing practices associated with COVID-19.

As outlined, FHA's extension of the re-verification of employment guidance is effective immediately for cases closed on or before August 31, 2020. It is also effective immediately for appraisal inspections completed on or before August 31, 2020.

FHA INFO 2020-44 - Temporary Waiver of QC Requirements for Early Payment Defaults

June 22, 2020 - Today, FHA issued a temporary waiver of its Single Family Housing Policy Handbook 4000.1 (SF Handbook) to temporarily suspend the requirement that mortgagees select and review all Early Payment Defaults (EPDs) on a monthly basis. An EPD refers to all mortgages that become 60-days delinquent within the first six payments.

As a result of the COVID-19 National Emergency, FHA has observed a significant increase in EPDs nationwide. Most are likely caused by loss of employment and/or income due to the public health emergency, and not the result of non-compliance with FHA Single Family origination and underwriting requirements. Therefore, FHA is providing mortgagees with flexibility by temporarily waiving its requirements found in SF Handbook, Sections V.A.3.a.i(C) and V.A.3.a.iv(B)(2).

With this waiver, mortgagees are not required to conduct quality control (QC) reviews of EPDs that would have been selected as part of a mortgagee's May, June, or July 2020 QC selections. Mortgagees must continue to meet all other loan-level QC requirements in SF Handbook, Section V.A.3. For example, mortgagees must select FHA-insured loans for review via random and discretionary sampling methods that meet the conditions described in Section V.A.3.a.iv. These random and discretionary samples may include EPDs.

Temporary Partial Waiver of QC Requirements for Field Reviews of Appraisals

June 22, 2020 - Today, FHA issued a temporary partial waiver of its Single Family Housing Policy Handbook 4000.1 (SF Handbook) to provide mortgagees with flexibility related to quality control (QC) field reviews of appraisals.

Considering the social distancing requirements in place in many areas of the country, mortgagees may be unable to conduct targeted field reviews of appraisals on 10 percent of FHA-insured mortgages selected for the monthly post-closing QC sample. Therefore, FHA is providing mortgagees with flexibility by temporarily waiving part of its requirements found in SF Handbook, Section V.A.3.c.ii(C)(1)(b).

With this waiver, mortgagees are permitted to use third-party tools as an alternative to field reviews of appraisals. Mortgagees must continue to meet all other appraisal QC requirements in SF Handbook, Section V.A.3.c.ii(C). For example, mortgagees must conduct desk reviews of appraisals following the standards described in Section V.A.3.c.ii(C)(1)(a).

This temporary partial waiver applies to QC reviews currently in process and for cases selected as part of a mortgagee's May, June, or July 2020 QC selections.

COVID-19 Impact on Mortgagee Compare Ratios

June 22, 2020 - FHA has observed a significant increase in default and claim rates nationwide, which it attributes to the financial impacts of the COVID-19 National Emergency. This increase may be impacting the Compare Ratios displayed in the Neighborhood Watch Early Warning System (Neighborhood Watch). While FHA is unable to remove any loans in default or claim status from Neighborhood Watch Compare Ratio calculations, including loans in forbearance for borrowers affected by the COVID-19 National Emergency, FHA will consider the impact of the COVID-19 National Emergency as a relevant mitigating factor when a mortgagee's Compare Ratio is above the designated threshold.

FHA uses Compare Ratios to determine whether termination or suspension of certain mortgagee authorities is warranted under the Credit Watch Termination and Lender Insurance (LI) Program monitoring processes. The regulations set forth in 24 CFR § 202.3(c)(2) and 24 CFR § 203.4(d) provide flexibility to consider relevant mitigating factors in deciding whether to terminate a mortgagee's origination, underwriting and/or LI authority.

FHA encourages mortgagees to continue monitoring Compare Ratios closely, and to apply QC flexibilities only to the extent necessary.

FHA INFO 2020-41 - FHA's Foreclosure and Eviction Moratorium Extended to August 31, 2020

June 17, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-19, Extension of Foreclosure and Eviction Moratorium in connection with the Presidentially-Declared COVID-19 National Emergency. This ML announces a second extension of the foreclosure and eviction moratorium through August 31, 2020.

This guidance is applicable to all FHA Title II single family forward mortgage and Home Equity Conversion Mortgage (reverse) programs, except for those secured by vacant and/or abandoned properties. Today's action further helps those individuals and families with FHA-insured homes who have been negatively impacted by the COVID-19 National Emergency.

FHA INFO 2020-39 - Digital Submission of Loss Mitigation Home Retention Claims on FHA Catalyst

June 12, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-18, FHA Catalyst: Claims Module - Single Family Forward Loss Mitigation Home Retention Claims. This ML announces the implementation of a new digital submission process that enables single or bulk loss mitigation home retention claims for Single Family forward mortgages to be transmitted through FHA Catalyst for the following loss mitigation home retention claim types:

• Claim Type 31 – Special Forbearance
• Claim Type 32 ** – FHA-HAMP Loan Modification
• Claim Type 33 ** – FHA-HAMP Partial Claim
• Claim Type 33 – Natural Disaster Standalone Partial Claim
• Claim Type 33 – National Emergency Standalone Partial Claim

Beginning Monday, June 15, loss mitigation home retention claims may be processed through the FHA Catalyst: Claims Module, which is the same portal utilized for supplemental claims. Submission of loss mitigation home retention claims through the FHA Catalyst: Claims Module is optional. The FHA Single Family Housing Claim Filing Technical Guide has been updated.

To access the FHA Catalyst: Claims Module, interested parties should contact the FHA Resource Center by email: answers@hud.gov or by calling 1-800-CALLFHA (1-800-225-5342). For more information, mortgagees may also refer to the FHA Catalyst: Claims Module User Guide.

FHA INFO 2020-36 - FHA Issues New Temporary Guidance on Mortgage Endorsements for Mortgages in Forbearance

June 4, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-16, Endorsement of Mortgages under Forbearance for Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

This ML informs mortgagees of temporary endorsement processes that will allow mortgages to be endorsed for insurance if the mortgages have closed in accordance with FHA requirements, but the borrower has requested or has been granted a forbearance post-closing due either directly or indirectly to the COVID-19 National Emergency.

As specified in ML 2020-16:

• These endorsements are conditioned upon the execution of a two-year partial indemnification agreement with FHA. The initial amount of partial indemnification is set at 20 percent of the original loan amount. The new temporary partial indemnification agreement and instructions for endorsing the loan and completing the agreement are posted on the Single Family Mortgages Model Documents page on hud.gov.
• Mortgagees may provide a modified certification statement on Form HUD 92900-A, Addendum to the Uniform Residential Loan Application, acknowledging they are aware of changes in the borrowers' employment status and their inability to make mortgage payments as a result of the COVID-19 National Emergency.
• HUD will continue to monitor the impacts to the market as well as implications to the Mutual Mortgage Insurance Fund (MMIF) and may adjust the level of partial indemnification for future indemnification contracts accordingly.

FHA Connection (FHAC) is being updated to allow mortgagees to identify endorsement of loans granted forbearance by the mortgagee after closing and then endorsed for FHA insurance consistent with ML 2020-16.

FHA-approved mortgagees should review ML 2020-16 in its entirety to ensure they fully understand the indemnification and insurance endorsement requirements for mortgages with borrowers negatively impacted by the COVID -19 National Emergency.

FHA INFO 2020-33 - 30-Day Notice of Proposed Information Collection: Application for FHA-Insured Mortgages (Loan-Level Certifications)

May 20, 2020 - On May 19, 2020, the Federal Housing Administration (FHA) published a 30-day Federal Register (FR) Notice (Docket No. FR-7024-N-22), which is an information collection requirement that outlines proposed revisions to FHA's loan-level certification.

This Notice is a follow-up to the 60-day FR Notice that published on October 25, 2019, which solicited public comments on the proposed draft of the significant revisions to the Form HUD-92900-A (Addendum to Uniform Residential Loan Application), that posted to the FHA Drafting Table last year.

This 30-day Notice provides responses to comments received from the 60-day Notice. No further changes or updates to Form HUD-92900-A from the original Notice are proposed. However, additional public comments may be submitted through June 18, 2020.

A Video Message from Federal Housing Administration Commissioner Brian Montgomery to Homeowners with FHA-Insured Mortgages

May 20, 2020 - In a video message launched this week, Federal Housing Administration (FHA) Commissioner Brian Montgomery speaks directly to homeowners with FHA-insured mortgages experiencing financial hardships caused by the COVID-19 emergency.
View the video message:

• English
• English/Spanish captioned

FHA INFO 2020-32 - Extension of Foreclosures and Evictions Moratorium and New Reporting Requirements Related to CARES Act Loss Mitigation Options

May 14, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-13, “Extension of Foreclosure and Eviction Moratorium in connection with the Presidentially-Declared COVID-19 National Emergency and New Reporting Requirements Related to FHA Single Family's CARES Act Loss Mitigation Options.”

This ML announces an extension of the foreclosure and eviction moratorium for all FHA-insured single family mortgages previously announced in ML 2020-04, to June 30, 2020. This extension excludes vacant and abandoned properties. In addition, today's ML announced new reporting requirements in FHA's Single Family Default Monitoring System (SFDMS) for loss mitigation options related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Read today's Press Release for more details on this topic.

Foreclosure and Eviction Moratorium Extension to June 30, 2020

This action extends a moratorium authorized by the Secretary of the Department of Housing and Urban Development (HUD) on March 18, 2020, in ML 2020-04 and continues to help minimize the pandemic's financial impact on individuals and families in response to the Presidentially-Declared COVID-19 National Emergency.

New Default and Delinquency Reporting Requirements

Mortgagees and servicers are required to select the appropriate default/delinquency reason codes to report the borrower's status at the end of each reporting cycle and update accordingly as their circumstances change. Effective May 1, 2020, FHA implemented new reason codes related to COVID-19, which should be applied to the April 2020 reporting cycle. Refer to the Single Family Default Monitoring System Codes Guide for more information.

FHA Extends Temporary COVID-19 Single Family Re-verification of Employment and Appraisal Protocols to June 30, 2020

Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-14, Extension of the Effective Date of Mortgagee Letter 2020-05, Re-verification of Employment and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted By COVID-19.
The Mortgagee Letter announces an extension of the effective date of the guidance contained in ML 2020-05, which provides flexible alternatives for re-verifying a borrower's employment and conducting appraisal reviews while physically-distancing during the Presidentially-Declared COVID-19 National Emergency.

As outlined in today's ML 2020-14, FHA's extension of appraisal guidance is effective immediately for appraisal inspections completed on or before June 30, 2020. The extension of re-verification of employment guidance is also effective immediately for cases closed on or before June 30, 2020.

FHA INFO 2020-31 - Interagency COVID-19 Forbearance Fact Sheet for Servicers and Consumers Now Available

May 8, 2020 - The Federal Housing Administration (FHA), Department of Agriculture (USDA), and Department of Veteran Affairs (VA), have aligned to provide the housing finance industry and consumers with information that outlines their responses to forbearance and loss mitigation options available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The Interagency COVID-19Forbearance Fact Sheet for Servicers provides guidance to assist borrowers seeking forbearance on their mortgage loans that are insured or guaranteed by these Agencies. A separate Interagency COVID-19 Forbearance Fact Sheet for Consumers is also available. This fact sheet outlines the steps borrowers need to take to request forbearance for their FHA-insured or USDA- or VA-guaranteed mortgages due to the COVID-19 National Emergency.

FHA INFO 2020-29 - Single Family CARES Act SFDMS Default Reporting

April 28, 2020 - Today, the Federal Housing Administration (FHA) announced the availability of a new Default Reason Code in the Single Family Default Monitoring System (SFDMS) to ensure that loss mitigation actions that result from the COVID-19 National Emergency are accurately recorded.

Specifically, mortgagees must follow the loss mitigation guidance in Mortgagee Letter 2020-06 — FHA's Loss Mitigation Options for Single Family Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency in Accordance with the CARES Act — and should also adjust their default reporting as described below.

Mortgagees are asked to begin using the new Default Reason Code 055 - Related to National Emergency Declaration, as soon as possible. This new Default Reason code is available beginning May 1, 2020, for the April 2020 reporting cycle. Mortgagees unable to use Code 055 should, instead, report using Code 010 - Neighborhood Problem, for the April cycle.

In addition, if the mortgage is newly defaulted (i.e., no open default episode), mortgagees are reminded to report Status Code 42 – Delinquent, and then Status Code 06 – Formal Forbearance.

FHA INFO 2020-28 - Mortgagee Review Board: Administrative Actions Notice Published in Federal Register

April 17, 2020 - On April 13, 2020, the Federal Housing Administration (FHA) published a notice in the Federal Register (FR) (Docket No. FR-6163-N-02) of all completed administrative actions taken by the U.S. Department of Housing and Urban
Development's (HUD) Mortgagee Review Board during the period from October 1, 2018, through September 30, 2019. The FR Notice provides a description of, and the cause for, the Mortgagee Review Board's administrative actions against HUD-approved mortgagees in 47 fact-based cases and 59 annual recertification violations.

FHA INFO 2020-27 - Additional Documentation Flexibility and Extensions of Deadlines for Filing HECM Assignment Claims

April 14, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-12, “Updated Guidance for Home Equity Conversion Mortgage (HECM) Claim Type 22 Assignment Claims during the COVID-19 National Emergency.” This ML provides the option for servicers to submit alternative documentation for specific claim requirements and extends delivery deadlines for Assignment Claims for HECM mortgagees that have been impacted by the Presidentially - Declared COVID-19 National Emergency.

For servicers that find their ability to obtain required documentation and meet standard deadlines is impacted due to the COVID-19 National Emergency, FHA now allows:

• Alternative documentation for specific HECM Claim Type 22 (CT-22) Assignment Claim requirements
• Extension of time for delivery of original Notes and Mortgages to the Secretary
• Extension of time for delivery of recorded assignments of Mortgage to the Secretary for HECMs with case numbers assigned before September 19, 2017.

This guidance applies only to the Single Family HECM program. FHA Mortgagees that service HECMs are strongly encouraged to read ML 2020-12 in its entirety.

In addition to the COVID-19-related options announced today, FHA will continue to comprehensively review its policies in its on-going efforts to provide servicers with the tools needed to assist homeowners with FHA-insured mortgages.

Updated Mortgagee Q&As and Other Information for Borrowers

FHA has also added new Q&As to its FHA Single Family COVID-19Q&A to address questions on mortgagee advances of property taxes on behalf of HECM borrowers and when mortgagees must notify HUD that a HECM has automatically become due and payable because of the death of the last surviving HECM borrower. Additional Q&As regarding Servicers' responsibilities in connection with the HECM-related provisions of Mortgagee Letter 2020-06, have also been added. The Q&A is available on the Single Family main page on hud.gov.

FHA has also posted a consumer-oriented Q&A to help homeowners better understand what loss mitigation options are available to them during this national emergency. It is available on the Loss Mitigation Services for FHA Homeowners page on hud.gov.

Temporary Partial Waiver for HECM Tax Arrearages during the COVID-19 National Emergency

April 14, 2020 - Today, the Federal Housing Administration (FHA) issued a temporary partial waiver of Mortgagee Letter 2015-11. This waiver allows mortgagees to offer a recalculated repayment plan for unpaid property charges to HECM borrowers.

Many HECM borrowers, like millions of other homeowners, are experiencing significant difficulties due to the COVID -19 national emergency including decreased income and reduced ability to move from their homes. Given these constraints, many HECM borrowers are likely unable to send, in accordance with their repayment plans, payments to their servicers in a timely manner.

This temporary partial waiver will allow them to repay property tax arrearages of any amount if the borrower is unable to make two consecutive payments during the COVID-19 national emergency. This waiver is effective immediately and will remain in effect until October 30, 2020.

FHA INFO 2020-26 - NEWS AND UPDATES

April 6, 2020 - The Federal Housing Administration's (FHA) new, web-based platform, FHA Catalyst, provides enhanced digital solutions for stakeholders conducting business with FHA. The platform's architecture allows FHA to respond quickly with technology solutions for evolving business needs in response to the COVID-19 National Emergency.
The platform has two modules available today for mortgagees:

• FHA Catalyst: Claims Module, which is now available to all servicers for the submission of forward mortgage supplemental claims.
• FHA Catalyst: Case Binder Module, which allows lenders to electronically submit case binder documents as an alternative to mailing paper binders.

See below for details.

Supplemental Claims Digital Submission Now Available on FHA Catalyst

Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-08, “FHA Catalyst: Claims Module — Single Family Forward Supplemental Claims Digital Submission.” This ML announced the implementation of a digital supplemental claims submissions option for Single Family forward mortgages through the FHA Catalyst, a new web-based platform designed to improve how stakeholders conduct business with FHA. The claims module, one component of FHA Catalyst, provides an electronic alternative to paper-based supplemental claims submissions and streamlines processes for servicers and FHA.

Servicers are encouraged to use this new platform; however, participation is optional. To request access to the FHA Catalyst: Claims Module, contact the FHA Resource Center by emailing answers@hud.gov or by calling 1-800-CALLFHA (1-800-225-5342). Interested parties may also receive training on this topic by accessing the free, pre-recorded webinar.

Case Binders for Mortgage Endorsements Include Digital Delivery Option

Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-07, “FHA Catalyst: Case Binder Module - Single Family Forward and Home Equity Conversion Mortgage (HECM) Electronic Endorsement Submission.” This ML announced the option to electronically deliver case binders for Single Family forward mortgage and HECM endorsements through the FHA Catalyst case binder module.

To ease the process for conducting business with FHA, mortgagees may use the module in conjunction with the requirements in Section II.A.7.d., Procedures for Endorsement, in Single Family Housing Policy Handbook 4000.1. The module enables non-lender insurance (LI) mortgagees the ability to electronically submit case binders for endorsement, in lieu of mailing paper binders to FHA Homeownership Centers. Mortgagees with LI authority that deliver paper case binders may also use this option to submit case binders with severe case warnings for reconsideration when the borrower failed or is pending social security number validation, or has a record found in the Credit Alert Verification Reporting System (CAIVRS).

The new FHA Catalyst: Case Binder Module excludes the delivery of both Single Family forward and HECM case binders selected for post-endorsement review at this time. Mortgagees approved for FHA's existing electronic Case Binder (eCB) delivery method through FHA Connection (FHAC) must continue to send electronic binders through FHAC.

Stakeholders are encouraged to utilize the case binder module; however, participation is not required. To access the module or receive guidance on its use, mortgagees should contact the FHA Resource Center by emailing answers@hud.gov or by calling 1-800-CALLFHA (1-800-225-5342).

The FHA Resource Center's online knowledge base has been updated with frequently asked questions related to this new technology. In addition, stakeholders can access the FHA Catalyst: Case Binder Module User Guide and pre-recorded webinar for more information.

Case Binders for Mortgage Endorsements Include Digital Delivery Option

Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-07, “FHA Catalyst: Case Binder Module - Single Family Forward and Home Equity Conversion Mortgage (HECM) Electronic Endorsement Submission.” This ML announced the option to electronically deliver case binders for Single Family forward mortgage and HECM endorsements through the FHA Catalyst case binder module.

FHA INFO 2020-24 - CARES Act Provides Additional Loss Mitigation Options for FHA-Insured Homeowners

April 1, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-06, FHA's Loss Mitigation Options for Single Family Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency in Accordance with the CARES Act. This ML implements the mortgage forbearance provisions provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that President Trump signed into law on March 27, 2020.

The loss mitigation options for borrowers experiencing a financial hardship negatively impacting their ability to make on-time mortgage payments due to the COVID-19 national emergency include:

1. Availability of up to six-months of mortgage payment forbearance for affected borrowers and an additional six-month period, if needed.
2. New COVID-19 national emergency stand-alone partial claim for eligible borrowers.
3. Extends certain due and payable, foreclosure, and claim timeframes for Home Equity Conversion Mortgages (HECM) affected by the COVID-19 national emergency.

Today's Mortgagee Letter also informs servicers of the use of the new COVID-19 loss mitigation tools for borrowers impacted by the national emergency in place of the guidance on Presidentially-Declared Major Disaster Areas in FHA's Single Family Housing Policy Handbook 4000.1.

This guidance applies to all FHA Title II Single Family mortgage programs. Mortgagees are strongly encouraged to read ML 2020-06 in its entirety.

In addition to the COVID-19-related loss mitigation options announced in today's ML, FHA will continue to review its policies in its efforts to provide servicers with the tools needed to assist homeowners with FHA-insured mortgages with even more flexibilities/relief efforts during this national emergency.

Information for Mortgagees and Borrowers

The FHA Single Family COVID-19 Q&A for mortgagees and other interested parties in FHA has been updated and is available on the Single Family main page on hud.gov.

FHA has launched a new consumer-oriented Q&A to help homeowners better understand what loss mitigation options are available to them during this national emergency. It is available on the Loss Mitigation Services for FHA Homeowners page on hud.gov.

Industry Webinar

FHA's Office of Single Family Housing plans to develop a webinar that focuses on the COVID-19-related loss mitigation options available to assist borrowers since the CARES Act became effective. Details about the upcoming webinar will be communicated at a future date.

FHA INFO 2020-22 - NEWS AND UPDATES

March 27, 2020 - As a result of the Presidentially-declared COVID-19 national emergency, the Federal Housing Administration (FHA) is announcing the following policy changes:

• Re-verification of Employment, and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted By COVID-19
• Temporary Waiver Provides Mailing Alternative for Condominium Project Approval Application Packages
• Temporary Waiver of Damage Inspection Reports in Presidentially-Declared Major Disaster Areas due to COVID-19
• Updated Single Family COVID-19 Q&A

See below for details.

Re-verification of Employment and Exterior-only and Desktop-only Appraisal Property Inspections Protocols

Today, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-05, “Re- verification of Employment and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted By COVID-19.”

This ML announced alternatives that mortgagees can use to re-verify borrower's employment for all FHA Single Family Title II forward mortgages and Home Equity Conversion Mortgages (HECMs) prior to settlement, where required, so long as certain other conditions are met.
Mortgagees can use the following alternatives to re-verify borrower's employment:

1. Year-to-date paystub or direct electronic verification of income dated immediately prior to the note date; or
2. Bank statement showing a direct deposit from the borrower's employer for the pay period that immediately precedes the settlement date.

For forward purchase transactions, the mortgagee must also provide documentation of a borrower's cash reserves equaling a minimum of two months of principal, interest, taxes, and insurance (PITI).

Additionally, this ML provides guidance that permits FHA roster appraisers to use exterior-only or desktop-only appraisal inspections as a substitute for interior inspections for most forward mortgage and Home Equity Conversion Mortgage (HECM) purchase transactions and exterior-only appraisal inspections for most forward refinance and HECM traditional and refinance transactions.

This amended guidance, which affects both origination and servicing, is effective until May 17, 2020, as detailed in ML 2020-05.

Temporary Waiver Provides Mailing Alternative for Condominium Project Approval Application Packages

Today, the Federal Housing Administration (FHA) issued a temporary waiver of its Single Family Housing Policy Handbook 4000.1 policy to provide an alternative to submitting Condominium project approval application packages by mail in the event of possible HUD office closures due to COVID-19. By using this alternative method, FHA employees working remotely can still retrieve and access packages for processing. This new alternative does not affect mortgagees that currently upload their packages through FHA Connection.

Submitters should create a PDF file of the package and send it via email to the FHA Resource Center at answers@hud.gov. The email “Subject Line” should read “Condominium Project Approval Application Package”. Upon receipt, FHA Resource Center staff will forward the package to the appropriate FHA Homeownership Center where it will be reviewed.

The email attachment should contain a single PDF file not to exceed 32 MB. Files larger than 32 MB must be emailed separately and each email should also include a brief project name and the total number of emails being submitted (e.g., “Towne Centre 1 of 3”).

This process applies to the submission of Condominiums for Project Approval and does not affect the requirements for Single-Unit Approval as outlined in ML 2019-13.

Temporary Waiver of Damage Inspection Reports in Presidentially-Declared Major Disaster Areas

Today, the Federal Housing Administration (FHA) issued a waiver of its Single Family Housing Policy Handbook 4000.1 (SF Handbook) policy to temporarily suspend the requirement that FHA roster appraisers must complete damage inspection reports for properties pending sale or endorsement in Presidentially-Declared Major Disaster Areas (PDMDAs) associated with COVID-19. This waiver of SF Handbook policy is effective immediately.

Updated Single Family COVID-19 Q&A Posted

FHA continues to revise its FHA Single Family COVID-19 Q&A as needed to keep stakeholders updated with the latest information about FHA's response to the Presidentially-declared COVID-19 national emergency. Refer to the Single Family main page on hud.gov for updates.

FHA INFO 2020-21 - FHA Suspends Foreclosures and Evictions Amid COVID-19 National Emergency

March 18, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2020-04, “Foreclosure and Eviction Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency,” which announces an immediate foreclosure and eviction moratorium for all FHA-insured single family mortgages for a 60-day period.

The Secretary of HUD authorized these moratoriums as a result of the national emergency declared by the President of the United States. They are part of a broader federal government effort to address impacts to the financial well-being of individuals, families, and businesses, and to ensure families are not displaced during this critical period.

Updates to Single Family's COVID-19 Q&A Available
FHA has developed and is maintaining a Q&A document to provide stakeholders with the latest information about FHA's response to the Presidentially-declared COVID-19 national emergency. An updated version of the FHA Single Family COVID-19 Q&A is now posted.

FHA INFO 2020-20 - Continuation of FHA Single Family Business Operations Related to COVID-19

March 13, 2020 - As it relates to COVID-19 (Coronavirus), the Federal Housing Administration (FHA) wants to assure its mortgagees and other interested stakeholders of its continued business operations in this evolving environment. Should FHA Single Family be required to close some or all its offices, our business operations will continue as usual; however, with some possible delays.

To help mitigate potential concerns about various aspects of our Single Family business and how they will continue during an office closure, a Questions and Answers (Q&A) document was developed to address stakeholder questions. This Q&A — which is posted on the Single Family main page — will be updated as needed. Stakeholders are advised to regularly access this document for updates.

Temporary Partial Waiver of Servicing Requirements Regarding Face-to-Face Contact with Borrowers

March 13, 2020 -Today, the Federal Housing Administration (FHA) published a regulatory waiver and an accompanying Single Family Housing Policy Handbook 4000.1 (SF Handbook) waiver of its required early default intervention requirements regarding in-person contact with borrowers. These waivers were issued due to the COVID-19 (Coronavirus) and are effective immediately.

These waivers temporarily allow servicers to utilize alternative methods for contacting borrowers — in lieu of face-to-face interviews — to meet the requirements of Section III.A.2.h.xii. of the SF Handbook and the regulation at 24 CFR §203.604. However, the face-to-face requirement for FHA-insured mortgages under the Section 248 - Single Family Mortgage Insurance on Indian Reservations, is still applicable.

FHA INFO 2020-18 - FHA-Approved Mortgagees' Loss Mitigation Home Retention Options for Assisting Borrowers

March 9, 2020 - The Federal Housing Administration (FHA) is reminding mortgagees of FHA's loss mitigation program options, particularly in light of the recent reports on the Coronavirus (COVID-19).

As with any other event that negatively impacts a borrower's ability to pay their monthly mortgage payment, FHA's suite of loss mitigation options provides solutions that mortgagees should offer to distressed borrowers – including those that could be impacted by the Coronavirus - to help prevent them from going into foreclosure. These home retention options are located in FHA's Single Family Housing Policy Handbook 4000.1 Section III.A.2.

Stakeholders are reminded to ensure that their responses remain faithful to obligations under the Constitution, Fair Housing Act, and related regulations. Exigencies associated with important and timely response to issues surrounding COVID-19 are not the basis for unlawful discrimination based on race, color, religion, national origin, sex, disability, or familial status.

FHA INFO 2020-15 - Proposed Claims Without Conveyance of Title Program Enhancements Posted on Drafting Table for Public Feedback

February 24, 2020 - Today, the Federal Housing Administration (FHA) announced that it has posted on its Single Family Housing Drafting Table, proposed enhancements to its Claims Without Conveyance of Title (CWCOT) program. All FHA-approved mortgagees, servicers, and other interested stakeholders are invited to review the posted content and provide feedback on the proposed program updates through March 9, 2020.

Originally piloted in 2013, CWCOT is an FHA claim option through which insurance benefits are paid to a mortgagee after the sale of the property to a third party at foreclosure of the FHA-insured mortgage or through a second chance sale. This means there is no conveyance of the property to the Department of Housing and Urban Development in exchange for payment of the mortgage insurance benefit.

While FHA's CWCOT program has enjoyed success to date, the agency has identified several key areas for improvement s to the existing program that could make it even more viable for foreclosure sales associated with defaulted FHA -insured mortgages going forward.

As previously mentioned, FHA is seeking feedback on the proposed CWCOT program enhancements posted on the Drafting Table. Once the two-week feedback period ends, FHA will carefully consider the responses received and — if and/or where applicable — incorporate that feedback into a final CWCOT policy document to be published at a later date.

Instructions for providing feedback are posted on the Drafting Table. Additionally, interested stakeholders can go to www.hud.gov/answers or call the FHA Resource Center at 1-800-CALLFHA (1-800-225-5342) for more information. Persons with hearing or speech impairments may reach the FHA Resource Center via TTY by calling the Federal Relay Service at 1-800-877-8339.

FHA INFO 2020-11 - Completion of the Lender Annual Recertification

February 12, 2020 - The annual recertification for lenders with a fiscal year ending December 31, 2019, is due no later than March 31, 2020.

Lenders are urged to complete their annual recertification package as soon as possible. If audited financial statements are unavailable, the Lender Data Verification, Certification, and Payment steps can be completed at any time.

If lenders do not want to renew their FHA approval, they must log-in to the Lender Electronic Assessment Portal (LEAP) and submit a voluntary withdrawal request. Failure to comply with the annual recertification requirements does not constitute a voluntary withdrawal.

For questions about the Lender Annual Recertification process, contact the FHA Resource Center at answers@hud.gov or call 1-800-CALLFHA (1-800-225-5342).

FHA INFO 2020-09 - 60-Day Notice for Condominium Project Approval Questionnaires Published in Federal Register and Posted on Single Family Housing Drafting Table

February 3, 2020 - Under the provisions of the Paperwork Reduction Act (PRA), the Federal Housing Administration (FHA) on January 31, 2020, published Federal Register (FR) Notice, Project Approval for Single Family Condominiums (Docket No. FR- 7027-N-06).

The 60-day PRA Notice seeks public comment on the renewal and revision of data collection forms HUD-9991, FHA Condominium Loan Level/Single-Unit Approval Questionnaire, and HUD-9992, FHA Condominium Project Approval Questionnaire. These forms are necessary to determine eligibility status for FHA single-unit or condominium project approvals.

Interested parties wishing to review the two forms can do so by visiting the Single Family Housing Drafting Table on hud.gov. Comments will be accepted through the method outlined in the FR Notice through March 31, 2020.

FHA INFO 2020-07 - Automated Setup of Electronic Funds Transfer (EFT) Accounts

January 29, 2020 - Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2020-02, Mortgagee Electronic Funds Transfer Accounts, that requires mortgagees to establish and maintain Electronic Funds Transfer (EFT) Accounts electronically. Previously, mortgagees had to submit a hard copy form to FHA to establish and maintain these accounts. EFT accounts permit FHA-approved mortgagees to receive payments from FHA when they submit FHA insurance claims.

The changes and additional guidance that allow for the establishment and maintenance of EFT Accounts electronically have been implemented in Lender Electronic Assessment Portal (LEAP) and FHA Connection (FHAC) and are effective immediately. Mortgagees must use the EFT Account Setup function in LEAP to provide their bank account information for FHA Insurance benefits payments. Hard copy forms will no longer be accepted.
Mortgagees should refer to the LEAP User Manual for specific instructions on establishing EFT accounts.

FHA INFO 2020-05 - Reminder - Guidance for FHA-Approved Mortgagees and Servicers Regarding Presidentially-Declared Major Disaster Areas

January 17, 2020 - Today, the Federal Housing Administration (FHA) is issuing this reminder to mortgagees about its guidance for originating and/or servicing FHA-insured forward mortgages in locations in the U.S. and its territories when the President declares it a major disaster area. This declaration is made when natural disasters or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond. The following guidance applies to all areas covered by a Presidentially- Declared Major Disaster Area (PDMDA), including those areas covered under the PDMDA declared on January 16, 2020 for Puerto Rico Earthquakes (DR-4473):

• FHA-insured forward mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster.
• FHA-insured reverse mortgages (HECMs) that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90- day extension of HECM foreclosure timelines.
• In PDMDAs only, FHA provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence foreclosure action or evaluate the borrower under HUD's loss mitigation program.

As a reminder, FHA's Disaster loss mitigation program includes:

• The Disaster Standalone Partial Claim option to help eligible borrowers on a forbearance plan resume their pre-disaster mortgage payments and avoid payment shock;
• Streamlined income documentation and revised loss mitigation procedures for a Disaster Loan Modification option and Disaster Standalone Partial Claim option; and
• A Trial Payment Plan as an alternative to providing income documentation for these disaster loss mitigation options.

Mortgagees should review complete servicing guidance in the Single Family Housing Policy Handbook
4000.1 (SF Handbook), Sections III.A.2 and III.A.3.c, relating to the servicing of mortgages in PDMDAs.
Mortgagees are reminded that they should begin reaching out to affected borrowers who may require loss mitigation assistance as soon as possible post-disaster. In preparation for assisting homeowners with longer-term recovery efforts, mortgagees should also review:

• FHA's 203(h) Mortgage Insurance for Disaster Victims requirements in Section II.A.8.b of the SF Handbook. The 203(h) program allows FHA to insure mortgages for victims of a major disaster who have lost their homes and are in the process of rebuilding or buying another home.
• FHA's 203(k) Rehabilitation Mortgage Insurance Program requirements in Section II.A.8.a of the SF Handbook. The 203(k) program provides mortgage financing or refinancing which includes the cost of home repairs – both structural and non-structural - into the loan amount.

Mortgagees can find more information about the policies referenced above and other FHA PDMDA policies on the FHA Resource Center's Online Knowledge Base.

FHA INFO 2020-01 - Defect Taxonomy Version 2 and Loan Review System Enhancements Now Effective

January 2, 2020 - Today, the Federal Housing Administration (FHA) implemented its Defect Taxonomy Version 2, effective for loan reviews beginning Wednesday, January 1, 2020. The new version includes various updates to the Defect Taxonomy originally implemented through the Loan Review System (LRS) in 2017.

The posting of Defect Taxonomy Version 2 on the Loan Review System webpage was first announced in FHA INFO 19-55 on October 28, 2019. It is one of several important milestone achievements in FHA's efforts to provide greater clarity and consistency for lenders.

Additionally, recent changes to LRS now allow lenders to submit optional responses to Tier 3 and 4 deficient findings, as well as Tier 1 and 2 findings that FHA has mitigated or remediated.

FHA's Defect Taxonomy Version 2 and an updated LRS User Manual can be accessed from the Loan Review System webpage on HUD.gov.