HUD

HUD Proposal to Strengthen Lender Indemnification

On October 8, HUD proposed regulations to strengthen its authority to force lenders to indemnify or reimburse the FHA for insurance claims paid on mortgages that do not meet the agency’s guidelines.  HUD seeks to force indemnification for “serious and material” violations of FHA origination requirements by lenders with special authority to insure mortgage loans on FHA’s behalf. HUD Release.

HAMP Update on New Dodd-Frank Certification Requirement

On September 21, Treasury and HUD issued a supplemental directive providing guidance on a new borrower certification for non-GSE loans included in the Making Home Affordable Program, as required under the Dodd-Frank Act. A servicer must now obtain a certification from a borrower that the borrower has not been convicted within the last ten years of: (i) felony larceny, theft, fraud or forgery, (ii) money laundering, or (iii) tax evasion in connection with a mortgage or real estate transaction.  HAMP Update.  Supplemental Directive.

HUD Launches FHA Short Refinance Option

On September 7, HUD launched the FHA Short Refinance option, which will allow underwater non-FHA borrowers (i) who are current on their existing mortgage and (ii) whose lien holders agree to write off at least 10% of the unpaid principal balance of the first mortgage, to qualify for a new FHA-insured mortgage.  To be eligible, servicers must execute a Servicer Participation Agreement with Fannie Mae, in its capacity as financial agent for the United States, on or before October 3. HUD Release. FHA Mortgage Letter.

HUD Proposes Initiatives to Boost FHA Capital Reserves

On July 15, HUD published a notice seeking public comment on three measures to restore the Mutual Mortgage Insurance Fund (the FHA capital reserve) to its statutorily mandated threshold. The proposed policy changes are to: (i) update the combination of credit and down payment requirements for new borrowers, (ii) reduce allowable seller concessions from 6% to 3%, and (iii) tighten underwriting standards for manually underwritten loans. Comments may be submitted through August 16th. HUD Release. HUD Notice.

Treasury and HUD Release Servicer Certification Guidance

On June 29, Treasury and HUD released Supplemental Directive 10-06: Guidance on Annual Servicer Certification Required by the “Servicer Participation Agreement” to provide additional guidance regarding the certification requirements and due dates for non-GSE servicers who have executed a Commitment to Purchase Financial Instrument and Servicer Participation Agreement under HAMP.  Release.  Supplemental Directive.

HAMP Performance Report

On May 17, Treasury and HUD released the April HAMP servicer performance report which shows a 13% increase in permanent modifications from the prior month and indicated that, by July, the reports will include more detailed performance measures, including a focus on the eight largest servicers, servicer compliance, program execution, and homeowner experience. Treasury Release. HAMP Report.

Treasury and HUD HAMP Update

On January 19, Treasury and HUD released an update on the progress of the Administration’s campaign to help borrowers convert from the trial phase of a mortgage modification to a permanent modification under HAMP.  The Administration has implemented a temporary review period, through January 31, to ensure that borrowers are fairly evaluated for the program.  Treasury Release.  Treasury Report.

HAMP Developments

On November 30, Treasury and HUD announced a campaign to increase the number of mortgages that are converted to permanent modifications from those currently in the trial phase of the Home Affordable Modification Program. The initiatives include: (i) increased servicer accountability for modifications, (ii) additional tools for borrowers, and (iii) the engagement of state and local stakeholders to increase awareness of the program and expand resources to borrowers. Treasury Release.

Also on November 30, Treasury published Supplemental Directive 09-09 which provides guidance on and terms of the Home Affordable Foreclosure Alternatives Program. This program offers financial incentives to servicers and borrowers who utilize a short sale or deed-in-lieu to avoid foreclosure on a HAMP-eligible loan. HAMP Release. Supplemental Directive.