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USDA/RHS RIN: 0575-AC85 Publication ID: Fall 2010 
Title: ●Implement Two New Loss Mitigation Authorities 
Abstract: The Section 502 Single Family Guaranteed Loan Program intends to publish a final rule to revise sections 1980.302 and 1980.373 to incorporate two new loss mitigation authorities that were granted through the passage of Bill S896 (Pub. L. 111-22). The forty year loan amortization authority allows for an existing Section 502 Single Family Guaranteed Loan Program loan to have it’s maturity date extended up to forty years from the date of loan modification to increase the affordability of the borrower’s monthly mortgage payment. The partial claim (Mortgage Recovery Advance) authority allows for the capitalzation of up to 12 months mortgage payments to include principal, interest, taxes, and insurance, and foreclosure costs, not to exceed 30 percent of the unpaid principal balance. The Mortgage Recovery Advance will be a recorded lien in subordinate priority to the existing first trust lien. No interest will accrue on the Mortgage Recovery Advance. The payment of the Mortgage Recovery Advance is not due until: (i) the maturity of the modified mortgage, (ii) a sale of the property, or (iii) a pay-off or refinancing of the mortgage. There will be no monthly payment required from the borrower. Additionally, the Section 502 Single Family Guaranteed Loan Program is enhancing it’s current loan modification policy to allow for the capitalization of legal fees and foreclosure costs related to a canceled action into the modified principal balance. The existing policy allows for the capitalization of principal, interest, taxes and insurance amounts in the modified loan amount. 
Agency: Department of Agriculture(USDA)  Priority: Substantive, Nonsignificant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Completed Actions 
Major: No  Unfunded Mandates: No 
CFR Citation: 7 CFR 1980 subpart D   
Legal Authority: 5 USC 301    7 USC 1989    42 USC 1480   
Legal Deadline:  None
Timetable:
Action Date FR Cite
Final Action  08/26/2010  75 FR 52429   
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Stuart Walden
Senior Loan Specialist
Department of Agriculture
Rural Housing Service
U.S. Department of Agriculture, 1400 Independence Avenue, SW, STOP 0784,
Washington, DC 20720
Phone:202 690-4507
Email: stuart.walden@wdc.usda.gov