In a bid to aid borrowers, the Department of Housing and Urban Development announced on Wednesday a series of temporary waivers that will allow servicers to use alternative methods when servicing FHA-insured forward and reverse mortgages.
Rather than conducting face-to-face interviews, HUD’s waiver will allow substitute methods for servicers to conduct borrower interviews for FHA-insured forward and reverse mortgages when performing early default interventions, specifically for borrowers in danger of foreclosure.
Alternative methods HUD listed included phone interviews, video calling services and other conference technology.
HUD also said it is waiving the $5,000 property charge payment arrearages cap for reverse mortgage borrowers who are behind on payments.
Under existing policy, when a borrower fails to make two consecutive payments on a HECM repayment plan, the plan fails and servicers may only offer the borrower a new repayment plan if the borrower’s total arrearage is less than $5,000. The new waiver will allow servicers to evaluate impacted borrowers regardless of how far behind they are.
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HUD will also waive the requirement for servicers to obtain a signature on an occupancy certification from a HECM borrower. While HUD requires mortgagees must continue to obtain the HECM borrower’s annual certification, the physical signature requirement is temporarily eliminated.
“President Biden has made it clear that protecting the health, safety, and homeownership security of the nation’s most vulnerable populations, including seniors, are urgent and immediate priorities,” said acting HUD secretary, Matthew Ammon. “The policy waivers issued today are another important step in addressing these priorities.”
HUD had previously released several variations of these waivers originally announced on Dec. 17, 2020 but were set to expire Feb. 28, 2021. However, with no clear route of the virus and the deployment of a vaccine, this latest set of temporary waivers is not set to runout until Dec. 31, 2021.
According to a release, the agency hopes to align these waivers with President Biden’s “Day One” request to provide aid to homeowners struggling from COVID-19. Prior to that request, the FHA extended its foreclosure and eviction moratorium for borrowers with FHA-insured single family mortgages through March 31, 2021.
FHA also extended the deadline for borrowers financially impacted by COVID-19 to request a new forbearance from their mortgage servicer through March 31, 2021.