RHS adopted a rule implementing changes to loss claim and loss mitigation processes. The rule streamlined the loss claim process for lenders who have acquired property through voluntary liquidation or foreclosure, clarified that lenders must comply with federal, state and local laws, and aligned loss mitigation policies with the mortgage industry.
Changes to the loss claim process include:
- Consolidation of Chapters 19 and 20 (in HB-1-3555) into one newly revised Chapter 19, Loss Claims – Collecting on the Guarantee;
- Elimination of the nine-month marketing period;
- Elimination of estimated net recovery calculation;
- A streamlined process for valuation of REO property;
- Utilization of the Veterans Administration’s Net Value Factor for calculation of property preservation costs;
- A requirement to submit a complete loss claim package within 60 days of the foreclosure, acquisition or possession date of the security property; and
- A requirement to submit loss claims electronically.
Changes to the loss mitigation process include:
- Greater emphasis on payment reduction as the primary driver of loss mitigation;
- Updates to requirements regarding the Modified Interest Rate; and
- A Mortgage Recovery Advance (MRA) option that will be available as a stand-alone option.
The adopted rule becomes effective April 24, 2020.
Link to the bulletin:https://content.govdelivery.com/accounts/USDARD/bulletins/27346bd
