FHA Notices and Reminders

On March 23, FHA released Two New Notices and Reminder for New and Existing Hope LoanPort Users.

Two New FHA Notices:

1. Attention Mortgagees and Servicers:

Below is a reminder on FHA’s current policy on the use of escrow funds:

Escrow Funds/Payoff Statements:

In accordance with the Code of Federal Regulations Title 24 202.5(d), the Lender or Mortgagee shall not use escrow funds for any purpose other than that for which they were received.  It shall segregate escrow commitment deposits, work completion deposits, and all periodic payments received under loans or insured mortgages on account of ground rents, taxes, assessments, and insurance charges or premiums, and shall deposit such funds with one or more financial institutions in a special account or accounts that are fully insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration, except as otherwise provided in writing by the Secretary.

To date, the Secretary has not authorized the use of escrow funds for purposes other than those stated in the regulation.  Therefore, reduction of loan principal is NOT an eligible purpose for the use of escrow funds.  Lenders or Mortgagees with an existing loan shall NOT apply escrow funds to reduce the outstanding loan balance in the payoff amount.  Escrow funds are the borrowers’ funds collected at loan closing and paid monthly thereafter for the purposes permitted in the cited regulation.  A lender or mortgagee holding escrow funds shall reimburse the borrower the full amount held in escrow no later than 30 days after the existing loan is paid off.

You can read the Code of Federal Regulations online at: http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR

For FHA technical support on this or any other FHA issue, please contact the FHA Resource Center at: www.hud.gov/answers  Search our online knowledge base & find answers to our most commonly asked questions. You can also get email technical support at: answers@hud.gov  or phone FHA toll-free between 8:00 a.m. & 8:00 p.m. ET (5:00 a.m. to 5:00 p.m. PT) at: (800) CALLFHA or (800) 225-5342. Call FHA TDD at: (877) TDD-2HUD (877) 833-2483).

2. HUD had developed a grass cut pricing schedule for the 2012 grass cut season:

This document can be found in the updated FAQs on HUD’s National Servicing Center (NSC) Mortgagee Compliance Manager website at: http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_16780.pdf  Please forward this document to your team as needed.  For more information please visit HUD’s NSC Mortgagee Compliance Manager website at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/mcm   Please direct any questions to the NSC via email at: MCMNSC@hud.gov 
Visit HUD’s NSC online at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/nschome

 

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees  and a handful of contractors performing services in the Midwest, to a national company with nearly 1,000 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

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