“Borrowers with a high loan-to-value ratio mortgage received some welcome news . . . when the Federal Housing Finance Agency announced that it plans to extend the Home Affordable Refinance Program into 2017 and unveiled a new refinance program that will take HARP’s place once it expires,” writes Ben Lane in an interesting housingwire.com piece headlined FHA makes it easier for struggling borrowers to keep their homes. “These programs apply to borrowers whose loans are owned by Fannie Mae and Freddie Mac, but what about struggling borrowers whose loans re insured by the Federal Housing Administration?” Lane’s piece continues:home

“Well, those borrowers are now about to get some relief of their own, as the FHA announced . . . that it is making it easier for struggling borrowers to keep their homes.

“The FHA said . . . that it is announcing new procedures to ‘strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes’.

“To that end, the FHA is ‘streamlining’ the loss mitigation protocols that mortgage servicers must use considering and utilizing ‘home retention options’, which are foreclosure alternatives that allow delinquent borrowers to retain their home.

“According to the FHA, these changes specifically apply to the process mortgage servicers use when evaluating borrowers for the FHA-Home Affordable Modification Program.

“The FHA said that the changes, which servicers must begin using by Dec. 1, 2016, will reduce the number of steps that a servicer and borrower must take to resolve a delinquency and enter into a loss mitigation home retention product.

“Additionally, the FHA announced that it is removing ‘certain obstacles’ that will give servicers greater flexibility for evaluating an unemployed borrower’s financial condition and special forbearance agreements.

“Specifically, the FHA said that it will now:

  • “Require servicers to convert successful 3-month trial modifications into permanent modifications within 60 days instead of the average four-to-six months
  • “Allow borrowers with three missed mortgage payments to qualify for a partial claim to bring their arrearages current versus the previous four-month minimum
  • “End the traditional stand-alone loan modification option so borrowers can access the FHA-HAMP option, with its greater payment relief, sooner
  • “Eliminate the minimum 12-month delinquency term to qualify for FHA’s special forbearance option, which will allow servicers extend this option to unemployed households sooner in their delinquency.”