FHA updates single family servicing guidelines

The Federal Housing Administration (FHA) updated its single family mortgage servicing guidelines on Monday. According to Acting HUD Associate Deputy Assistant Secretary for Single Family Housing Julie Shaffer, the changes reflect “feedback we’ve received about the complexity and cost of servicing FHA-insured mortgages,” and include streamlined documentation requirements and revisions to certain fee structures to bring them more in line with existing industry practices.

The new guidelines incorporate additional protections for borrowers as well, including by codifying measures FHA has already taken to protect consumers during the pandemic. For example, the guidelines provide struggling homeowners easier entry into the FHA Home Affordable Modification Program without a long period of forbearance, a policy FHA says is “proven to be highly effective at helping borrowers avoid redefault and foreclosure.”

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