View Rule

Over the past decade, the costs associated with servicing both performing and non-performing mortgages throughout the industry have increased significantly. Independent estimates indicate that the costs of servicing non-performing FHA mortgage loans are now multiples above the costs of servicing conventional mortgage loans. This adversely impacts servicers as well as borrowers who have the costs passed onto them in the form of higher mortgage fees. Reducing costs of servicing will ultimately benefit the public by providing a reduced cost of credit. Furthermore, FHA is working to protect communities by reducing unnecessary holding costs to HUD, limiting depreciation of the property value, and reducing neighborhood blight caused by properties that sit vacant for extended periods of time. This will also improve HUD's ability to manage the MMI Fund, to better serve low to moderate homeowners including underserved communities. This proposed rule includes limiting required mortgagee curtailment of interest to the length of the mortgagee’s delay and ensures it is applied equitably across all disposition methods. It would also limit reimbursement of property related expenses to those incurred within certain established timeframes for forward and Home Equity Conversion Mortgages. Finally, this rule establishes a deadline that defines FHA’s liability for claim payments for insurance benefits.