FHA Eyes Electronic Communication with Proposed Modernized Engagement for Defaulting Borrowers
August 1, 2023
Source: National Mortgage Professional
The Federal Housing Administration (FHA) has announced a long-awaited proposal that could revolutionize how mortgage companies engage with borrowers in default. Published Monday in the Federal Register, the proposed rule is open for public comment and seeks to update the Department of Housing and Urban Development’s (HUD) existing regulation that mandates in-person meetings with defaulting borrowers.
The new proposal comes as a response to technological advancements and changes in borrower preferences. If adopted, it would:
- Enable Remote Communication: Mortgage servicers could use electronic and remote communication methods to satisfy FHA’s early default intervention requirements, leveraging the techniques successfully used during the pandemic.
- Remove Travel Requirements: The proposal would eliminate the need for mortgage servicers to make at least one trip to the mortgaged property to schedule a meeting with the borrower, cutting unnecessary costs and time.
- Expand Meeting Accessibility: It would also extend the meeting requirement to include borrowers not residing in the mortgaged property or those outside the 200-mile radius of their mortgage servicer or a branch office, increasing inclusivity.
For full report, please click the source link above.