RHS issued a SFH Guaranteed Servicing Notice (Notice) announcing the adoption of a final rule amending special servicing options for non-performing loans and adjusting the Mortgage Recovery Advance (MRA) process. Per the Notice, highlights of the final rule include:
- A final offer has been created as a pre-foreclosure alternative;
- Special Loan Servicing is no longer a separate option in the waterfall, as all Loss Mitigation options have been combined into one waterfall;
- When processing a loan modification, servicers may extend the term in one-month increments, up to a maximum of 480 months until the targeted payment reduction has been achieved;
- The ratio cap for total debt to income has been eliminated;
- MRAs executed on or after the effective date of the final rule will not be secured by a lien in favor of the USDA but will remain a part of the servicer’s first lien; and
- A borrower may receive multiple MRAs as long as the cumulative amount of MRAs is less than or equal to 30% of the unpaid principal balance at the time of default.
The final rule is effective February 11, 2025.
Click to view the RHS Final Rule: https://www.tenaco.com/wp-content/uploads/2024/08/RHS-Final-Rule-08-15-24.pdf
Click to view the RHS SFH Guaranteed Servicing Notice: https://www.tenaco.com/wp-content/uploads/2024/08/RHS-SFH-Guaranteed-Servicing-Notice-08-15-24.pdf
