FHA issued Mortgagee Letter 2021-18, establishing new, streamlined COVID-19 recovery loss mitigation options. Per the Mortgagee Letter, FHA amended COVID-19 loss mitigation policies for borrowers with FHA-insured forward mortgages and established the COVID-19 Recovery Loss Mitigation Options (COVID-19 Recovery Options) waterfall. The COVID-19 Recovery Options waterfall is a 2-step waterfall that includes the COVID-19 Recovery Standalone Partial Claim (for borrowers who can resume making their current monthly payments) and the COVID-19 Recovery Modification (for borrowers who cannot resume making their current monthly payments). In addition, FHA is requiring mortgage servicers to re-review borrowers for the new COVID-19 Recovery Options in circumstances where an existing home retention option has not been completed, where the borrower was previously ineligible for a COVID-19 home retention option, or if the borrower has re-defaulted after a COVID-19 home retention option. The updates are effective October 21, 2021 (servicers may, however, implement the changes immediately).
Click to view the FHA Mortgagee Letter 2021-18: https://www.tenaco.com/wp-content/uploads/2021/07/FHA-Mortgagee-Letter-2021-18-07-23-21.pdf
Click to view the FHA Info#21-61: https://www.tenaco.com/wp-content/uploads/2021/07/FHA-Info-21-61.pdf
