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The Federal Housing Administration’s proposed implementation of a new rule removing the face-to-face meeting requirement for certain mortgagees could actually increase the complexity and risk of the borrower engagement process, the American Bankers Association and three associations said late last week in a joint letter to the agency.
In August, FHA issued a final rule that made permanent a pandemic-related rule that waives the Department of Housing and Urban Development’s requirement for mortgagees to meet in person with borrowers who are in default on their mortgage payments. The agency has since published a draft mortgagee letter outlining how the policy change will be implemented. ABA and the other associations support providing more flexibility in the engagement processes, but said the draft letter could make the process more onerous as it is “vague and operationally infeasible.”