FHA issued Mortgagee Letter 2023-02, extending the availability of, and expanding, COVID-19 recovery loss mitigation options. Per the Mortgagee Letter, FHA:
- Extended the COVID-19 Recovery Loss Mitigation Options to all borrowers in default or imminent default (including non-occupant borrowers), regardless of the reason for the borrower’s hardship;
- Updated the COVID-19 Recovery Standalone Partial Claim and the COVID-19 Recovery Modification to raise the maximum partial claim amount permitted from 25% to the 30% allowed by statute;
- Provided incentive payments to servicers for the successful completion of COVID-19 Recovery Options;
- Added a new Default status code to the Single Family Default Monitoring System (SFDMS) Reporting Codes; and
- Suspended FHA-Home Affordable Modification Program (HAMP) options, and HUD’s non-COVID Pre-Foreclosure Sale and Deed-in-Lieu (DIL) of Foreclosure options concurrent with this Mortgagee Letter.
The provisions of the Mortgagee Letter must be implemented no later than April 30, 2023 in all cases where the mortgagee has not sent documents to the borrower to complete any Home Retention loss mitigation option ((servicers may, however, implement the changes immediately). The COVID-19 Recovery Options may be offered through October 30, 2024, and must be completed no later than February 27, 2025.
Click to view the FHA Info # 2023-06: https://www.tenaco.com/wp-content/uploads/2023/02/FHA-Info-2023-06-01-30-23.pdf
Click to view the FHA Mortgagee Letter 2023-02: https://www.tenaco.com/wp-content/uploads/2023/02/FHA-Mortgagee-Letter-2023-02-FHA-Info-2023-06-01-30-23.pdf
