RHS issued a Federal Register Notice (Notice) introducing the Payment Supplement Account Demonstration Program (Program) which establishes a new loss mitigation retention option referred to as the Payment Supplement Account (PSA). The intent of the demonstration program is to assist borrowers who have experienced a documented hardship that led to an involuntary inability to pay the mortgage obligation. The PSA will be funded by a stand-alone Mortgage Recovery Advance that allows the servicer to advance funds on behalf of the borrower to satisfy the borrower’s arrearage, pay legal fees and foreclosure costs related to a cancelled foreclosure action, and reduce the principal balance of the loan. In order to qualify for the Program, the borrower must occupy the home as a principal residence, the servicer must target a 25% principal and interest reduction, and the borrower must sign an agreement to repay the advance in full. Additional qualification requirements apply. The Program went into effect July 24, 2024. The duration of the Program is anticipated to continue until July 24, 2026.
Click to view the RHS Federal Register Notice (7 CFR Parts 3555)-Federal SFHGH Payment Supplement Account Demonstration Program: https://www.tenaco.com/wp-content/uploads/2024/07/RHS-Federal-Register-Notice-7-CFR-Parts-3555-Federal-SFHGH-Payment-Supplement-Account-Demonstration-Program-07-24-24.pdf
