Waters Calls For Stronger FHA Foreclosure Protections

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House Financial Services Committee Chair Maxine Waters, California, released two letters late last week urging federal agencies to provide more foreclosure buffers to bridge the gap between the end of the ban and the introduction of new rules for servicing future loans. due to abstinence related to CARES.

In one letter posted late last week, Waters called on three housing agencies to follow suit. Federal Agency for Housing Finance do Consumer Financial Protection Bureau rules for foreclosures starting August 31 previously valid for loan products insured or guaranteed by the Federal Housing Administration, the Ministry of Agriculture and the Department of Veterans Affairs.

The letter also called for the Department of Housing and Urban Development to double the six-month deadline it is proposing for recent requests to withhold FHA loans. He also called on HUD to provide adequate protection for some senior withdrawal loans.

In a second letter sent on Friday, Waters called on government agencies overseeing banks and consumer protection – the Consumer Financial Protection Bureau, the Comptroller’s Office, the Federal Deposit Insurance Corporation, the Federal Reserve Board of Governors, the State Bank Conference. Supervisors and the National Credit Union Administration to enforce foreclosure rules.

“Providing clear guidance to servicing mortgages and strengthening supervision and enforcement during this period is critical to ensure that homeowners do not face unnecessary foreclosures during August and before Housing Advisory and Homeowner Assistance Funds disbursed in communities and households will be reached under the American Rescue Plan Act, ”Waters wrote.

FHA and VA guaranteed mortgages had relatively higher abstinence rates than GSEs. The FHA / VA ratio was 6% compared to 2% for GSE in the latest weekly Black Knight report. In total, more than 1.86 million borrowers were deferred in the last week monitored by the Black Knight, down 71,000 from the previous period.

Foreclosures usually have rather lengthy processing times, especially in states where they go through the court system. Projections suggest that between this and the available deferral of foreclosures, very few foreclosures will take place in July alone. The FHA offers borrowers who apply for this a grace period of up to six months from July 1 to September 30. Some of the earlier requests had longer deadlines. Abstinence expiration is expected to be splash this fall.



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