REGULATORY CORNER

REMINDER REGARDING USE OF HOMEOWNER ASSISTANCE FUNDS WITH FHA-INSURED MORTGAGES

The Federal Housing Administration (FHA) is reminding servicers about the use of the U.S. Department of the Treasury’s Homeowner Assistance Fund (HAF).

This fund helps borrowers with FHA-insured single family forward mortgages and Home Equity Conversion Mortgages (HECM) who are struggling with their mortgage payments.

The American Rescue Plan Act of 2021 established HAF to provide financial assistance to eligible homeowners who suffered hardships during the COVID-19 national emergency. Through HAF, eligible homeowners can receive assistance to cover qualified expenses that may include housing-related costs.

Servicers of FHA-insured mortgages are required to inform distressed homeowners about funds available through their jurisdiction’s HAF program. As allowable by the homeowner’s HAF program, HAF may:

• Be used to bring the homeowner’s mortgage current;

• Be used in combination with certain FHA loss mitigation options for single family forward mortgages;

• Reduce the balance or pay off the homeowner’s outstanding loss mitigation partial claim, even if their mortgage payments are now current;

• Be used in combination with the COVID-19 HECM Property Charge Repayment Plan; and

• Pay for delinquent property tax and homeowners insurance charges on defaulted HECMs, if permissible under their jurisdiction’s HAF program guidelines.

FHA also has expanded the definition of imminent default to include homeowners who qualified for HAF. With this change, servicers will be able to offer additional loss mitigation options to borrowers who qualified for or used HAF funds and may no longer technically be delinquent but require further assistance to avoid redefault.

For additional guidance, servicers and other interested stakeholders should view the FHA FAQs webpage at www.hud.gov/answers and click on the Treasury Homeowner Assistance Fund (HAF) Program box under the Featured Content section.

MORE THAN 6.7 MILLION TROUBLED HOMEOWNERS HELPED DURING CONSERVATORSHIPS

The Federal Housing Finance Agency’s fourth quarter 2022 Foreclosure Prevention and Refinance Report showed that Fannie Mae and Freddie Mac completed 52,469 foreclosure prevention actions during the quarter. This raised the total number of homeowners who have been helped to 6,712,833 since the start of conservatorships in September 2008.

The report also shows that 37% of loan modifications completed in the fourth quarter reduced borrowers’ monthly payments by more than 20%. The number of refinances decreased amid rising mortgage rates from 194,189 in the third quarter to 111,251 in the fourth quarter.

Fannie Mae and Freddie Mac’s serious delinquency rate declined slightly from 0.68 percent to 0.65 percent at the end of the fourth quarter. This compares with 4.40% for Federal Housing Administration (FHA) loans, 2.43% for Veterans Affairs (VA) loans, and 1.89% for all loans industry average).

Other highlights from the report include:

• Forbearance: As of Dec. 31, 2022, there were 81,173 loans in forbearance, representing approximately 0.26% of Fannie Mae and Freddie Mac’s single-family conventional book of business, up from 78,432 or 0.25 percent at the end of the third quarter of 2022. Approximately 3% of these loans have been on a forbearance plan for more than 12 months.

• Mortgage Performance: The 60-plus day delinquency rate increased slightly from 0.83% at the end of the third quarter to 0.84% at the end of the fourth quarter. The delinquency rates remained slightly higher than pre-coronavirus rates due to the forbearance programs offered to borrowers affected by the pandemic.

• Foreclosures: The number of foreclosure starts increased 8% to 18,693 while third-party and foreclosure sales dropped 8% to 3,297 in the fourth quarter.

• Real Estate Owned (REO) Activity & Inventory: Fannie Mae and Freddie Mac’s REO inventory increased 7% from 10,251 in the third quarter to 10,997 in the fourth quarter of 2022, as REO acquisitions outpaced property dispositions. The total number of property acquisitions decreased 9% to 1,706, while dispositions decreased 2% to 977 during the quarter.

FHFA’s quarterly foreclosure prevention and refinance reports include data on Fannie Mae and Freddie Mac’s mortgage performance, delinquencies, and active forbearance plans, as well as forfeiture actions and refinances by state.

STAFF

Vincent M. Valvo

CEO, PUBLISHER, EDITOR-IN-CHIEF

Beverly Bolnick ASSOCIATE PUBLISHER

Christine Stuart EDITORIAL DIRECTOR

David Krechevsky EDITOR

Keith Griffin

SENIOR EDITOR

Mike Savino

HEAD OF MULTIMEDIA

Katie Jensen, Steven Goode, Sarah Wolak STAFF WRITERS

Rob Chrisman, Nir Bashan CONTRIBUTING WRITERS

Gary Rogo SPECIAL SECTIONS EDITOR

Alison Valvo

DIRECTOR OF STRATEGIC GROWTH

Steven Winokur

CHIEF MARKETING OFFICER

Julie Carmichael

PROJECT MANAGER

Meghan Hogan DESIGN MANAGER

Christopher Wallace, Stacy Murray GRAPHIC DESIGN MANAGERS

Navindra Persaud

DIRECTOR OF EVENTS

William Valvo UX DESIGN DIRECTOR

Andrew Berman HEAD OF CUSTOMER OUTREACH AND ENGAGEMENT

Tigi Kuttamperoor, Matthew Mullins, Angelo Scalise MULTIMEDIA SPECIALISTS

Melissa Pianin MARKETING & EVENTS ASSOCIATE

Kristie Woods-Lindig ONLINE ENGAGEMENT SPECIALIST

Nicole Coughlin, Nichole Cakirca ADVERTISING ASSOCIATES

Lydia Griffin MARKETING INTERN

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