HUD Mortgagee Letters

FHA Extends Waiver of Anti-Flipping Regulations Through 2012:

In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante will extend FHA’s temporary waiver of the anti-flipping regulations. 

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  All other terms of the existing Waiver will remain the same.  The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.  The Waiver continues to be limited to sales meeting the following conditions:

·         All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

·         In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.

·         The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Notice on FHA Mortgage Limits:

As announced, on December 2, 2011 FHA issued Mortgagee Letter 2011-39 (ML 11-39) “Federal Housing Administration Maximum Loan Limits Effective October 1, 2011 through December 31, 2012”  The loan limits for effective dates as referenced in ML 11-39 have now been posted to FHA’s website: https://entp.hud.gov/idapp/html/hicostlook.cfm The loan limit data files have also been updated and posted for download from this site: http://www.hud.gov/pub/chums/file_layouts.html

For ease of reference, it has been identified that  six (6) counties have had loan limits increase for Calendar year 2012 from those in effect during 2011.  These counties and limit changes are as follows:

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FY2012 Median Family Income Limits:

HUD has released its FY2012 Median Family Income estimates and FY2012 Income Limits, effective December 1, 2011. All of the FY2012 Income Limit materials, including the interactive documentation systems are available at: http://www.huduser.org/portal/datasets/il/il12/index.html

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING FEDERAL HOUSING COMMISSIONER

November 30, 2011

MORTGAGEE LETTER 2011-38

TO: ALL APPROVED MORTGAGEES, ALL HUD-APPROVED NONPROFIT ORGANIZATIONS

SUBJECT: Secondary Financing Eligibility Requirements for IRC Section 115 Nonprofits Rescission of Mortgagee Letter 2009-38

Purpose: Mortgagee Letter 2009-38 announced that the Department of Housing and Urban Development allowed, on a temporary basis, nonprofit instrumentalities of government eligible for approval by the Federal Housing Administration (FHA) to include entities whose income is excluded from Federal taxation under section115 of the Internal Revenue Code of 1986 (IRC) (Section 115 nonprofit instrumentalities of government). Eligible Section 115 nonprofit instrumentalities of government were placed on the FHA Nonprofit Organization Roster (Roster) and allowed to participate in single-family housing programs as providers of secondary

financing. Mortgagee Letter 2009-38 also announced that the Department waived the voluntary board requirement at 24 CFR section 203.41(a)(5)(ii) for all nonprofit instrumentalities of government whose income is exempt or excluded from taxation under IRC sections 501(c)(3) and 115, respectively. Mortgagee Letter 2009-38 is no longer in effect and is superseded, in its entirety, by this Mortgagee Letter…

To read both these mortgagee letters and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

HUD’s Mortgagee Review Board Frequently Asked Questions Regarding Allied Home Mortgage Corporation for Consumers and Industry Partners:

On November 1, 2011, HUD’s Mortgagee Review Board suspended the FHA origination and underwriting approval of Allied Home Mortgage Corporation.  The below “Frequently Asked Questions” provide additional details regarding the implications of this action for consumers and lenders:

·         FHA-Insured Loans Associated with Allied Home Mortgage Corporation Questions and Answers for Consumers: http://portal.hud.gov/hudportal/documents/huddoc?id=alliedconsumers110411.pdf

·         FHA-Insured Loans Associated with Allied Home Mortgage Corporation Questions and Answers for Industry Partners: http://portal.hud.gov/hudportal/documents/huddoc?id=alliedindustry110411.pdf

New FHA Mortgagee Letter:

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSINGFEDERAL HOUSING COMMISSIONER

October 18, 2011

MORTGAGEE LETTER 2011-37

TO: ALL APPROVED MORTGAGEES

SUBJECT: Extension of Implementation and Reporting Dates Regarding Trial Payment Plan for Loan Modifications and Partial Claims under Federal

Housing Administration’s Loss Mitigation Program

The purpose of this Mortgagee Letter is to revise the implementation and reporting dates associated with Mortgagee Letter 2011-28, Trial Payment Plan for Loan Modifications and Partial Claims under Federal Housing Administration’s Loss Mitigation Program.

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

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FHA Posts New Frequently Asked Questions (FAQs) about Mortgagee Letter 2011-29 and FHA Mortgage Limits:

To read the Updated FHA Mortgage Limit FAQs please visit: http://portal.hud.gov/hudportal/documents/huddoc?id=faqfha.pdf

To read this Mortgagee Letter 2011-29 and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/  view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER

September 23, 2011

Mortgagee Letter 2011-34

To: FHA Approved Lenders and Applicants for FHA Lender Approval

Subject: Revised Lender Approval Requirements

Purpose of Mortgagee Letter: The purpose of this Mortgagee Letter is to announce changes to the requirements for obtaining, maintaining and utilizing an entity’s FHA lender approval…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING- FEDERAL HOUSING COMMISSIONER

September 6, 2011

Mortgagee Letter 2011-33

To: ALL APPROVED MORTGAGEES

Subject: Mortgage Record Changes and Data Reconciliation

Purpose: This Mortgagee Letter announces that FHA approved Holders and Servicers are subject to sanctions for failure to report Mortgage Record Changes (MRC) for mortgage sales, transfers and terminations of mortgage insurance. Mortgagees who fail to comply may be subject to referral to the Mortgagee Review Board (MRB) for administrative actions including but not limited to civil money penalties…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

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Three Notices for FHA Lenders:

1.     Beginning Monday, September 12, 2011, lenders will no longer be able to order a streamline refinance case with an appraisal.  The only available streamline refinance case type will be streamline without appraisal.  A prior FHA refinance case with appraisal should be ordered as a fully processed Prior FHA case with an appraisal.

2.       Beginning Monday, September 12, 2011, for Streamline Refinances cases without an appraisal, when a prior FHA refinance case is netted to a new case number, the outstanding principal balance for the projected month of closing and the following month will automatically be provided in FHA Connection.  These fields will appear on the Case Number Assignment screen when the case number is assigned.  They will also appear on Refinance Authorization and Refinance Credit Query.  The values will be used to limit the entry in the Unpaid Principal Balance field on FHAC Insurance Application for FHA to FHA refinance cases.  The Unpaid Principal Balance amount is used to determine the maximum mortgage allowed for the case.  For this reason, it is very important that the lender enter an accurate projected closing date.  If they find the entered closing date is no longer accurate, they should correct it, prior to remitting UFMIP, using FHAC Refinance Authorization to obtain a new outstanding principal balance from A43 before processing Insurance Application.

New FHA Mortgagee Letter:

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING FEDERAL HOUSING COMMISSIONER

AUGUST 22, 2011

MORTGAGEE LETTER 2011-30

To ALL APPROVED MORTGAGEES, ALL FHA ROSTER APPRAISERS

Subject: The Uniform Appraisal Dataset (UAD) and appraisal reporting forms

Purpose of this Mortgagee Letter: The Federal Housing Administration (FHA) will adopt the Uniform Appraisal Dataset (UAD) and two of the UAD compliant appraisal reporting forms, which further define specific data fields in these industry standard appraisal reporting forms…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

NOTICE OF FHA LOAN LIMIT EFFECTIVE OCTOBER 1, 2011 THROUGH DECEMBER 31, 2011

This provides notice of the posting of the comprehensive update to the Federal Housing Administration’s (FHA) single-family loan limits which are effective on or after October 1, 2011 through December 31, 2011.  These limits apply to forward mortgages insured under section 203(b)(2) of the National Housing Act and  reverse mortgages insured under section 255 (Home Equity Conversion Mortgages (HECM)).  A mortgagee letter providing further guidance has been issued August 19, 2011.

For Forward Mortgages, the FHA floors for the period October 1, 2011 through December 31, 2011 are $271,050, $347,000, $419,425 and $521,250 for 1-, 2-, 3- and 4-unit dwellings, respectively.  The FHA ceilings are $625,500, $800,775, $967,950 and $1,202,925 for 1-, 2-, 3- and 4-unit dwellings, respectively.  For all other areas, i.e., those where 115 percent of the median home price for the area is in between the floor and the ceiling, the limit shall be at 115 percent of the median home price.  For areas under Section 214 of the National Housing Act (Alaska, Guam, Hawaii and the Virgin Islands), higher ceilings of $938,250, $1,201,150, $1,451,925 and $1,804,375 for 1-, 2-, 3-, and 4-unit dwellings, respectively, apply. 

For HECMS, the maximum claim amount will remain at $625,500.

As HUD is not updating median prices at this time, there is no appeal period associated with the change of loan limits on October 1, 2011. 

For calendar year 2012, HUD does expect to announce proposed maximum mortgage amounts in November 2011. Once the principles set forth in the Mortgagee Letter announcing the loan limits that take effect on October 1, 2011, there will be no further declines in any loan limits for 2012, absent a change in authorizing legislation. As all locality specific maximum mortgage amounts are ultimately tied to the so-called national conforming loan limit of 12 USC 1454(a)(2)(C), and that limit may only go up and not go down over time, county-level loan limits under current statutory authority may only go up in the future and not go down.

Complete schedules of FHA mortgage limits for all areas for forward mortgages will be available through the downloadable file links found at https://entp.hud.gov/idapp/html/hicostlook.cfm The website also provides a current look-up tool that will have the capability of finding loan limits for periods in 2011 and 2012.  Please read these FHA Maximum Mortgage Limit FAQs: http://portal.hud.gov/hudportal/documents/huddoc?id=faqfha.pdf

If you have questions regarding this notice, please call FHA’s Resource Center at 1-800-CALL-FHA (1-800-225-5342).  Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483). You can also get email technical support on FHA mortgage limits at: answers@hud.gov or by visiting: www.hud.gov/answers

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New FHA Mortgagee Letter:

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING- FEDERAL HOUSING COMMISSIONER
Date: August 19, 2011

To: All Approved Mortgagees

Mortgagee Letter 2011-29

Subject: Federal Housing Administration’s (FHA) Maximum Loan Limits Effective October 1, 2011 through December 31, 2011

Purpose: This Mortgagee Letter provides notice of FHA’s single family housing loan limits for Forward Mortgages and Home Equity Conversion Mortgages (HECMs) effective October 1, 2011 through December 31, 2011, provides loan limit instructions for FHA-insured to FHA-insured refinance transactions, and provides eligibility criteria and instructions for pipeline loans which have not closed on or before September 30, 2011…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING- FEDERAL HOUSING COMMISSIONER

August 15, 2011

MORTGAGEE LETTER 2011-28

TO: ALL APPROVED MORTGAGEES

SUBJECT: Trial Payment Plan for Loan Modifications and Partial Claims under Federal Housing Administration’s Loss Mitigation Program

PURPOSE: The purpose of this Mortgagee Letter is to identify circumstances under which mortgagors must successfully complete a trial payment plan prior to the mortgagee executing a loan modification or partial claim action under the Federal Housing Administration’s (FHA) Loss Mitigation Program. In addition, this Mortgagee Letter announces the time requirements for mortgagees to complete permanent loan modification and partial claim documents in order to receive an incentive fee. These requirements are effective October 1, 2011…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

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New FHA Housing Notice:

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING- FEDERAL HOUSING COMMISSIONER

Notice H 2011-16

Issued August 12, 2011 Expires: August 31, 2012

Special Attention of: All Homeownership Center Directors, All Real Estate Owned (REO) Directors,  All Management and Marketing Contractors,  All Interested Parties

SUBJECT: Extension of the Dollar Home Sales to Local Governments Program

Purpose: This Notice announces the extension of the subject program for a period of one year from the above mentioned Date of Issuance…

New FHA Mortgagee Letter:

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D.C. 20410-8000

OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER

July 7, 2011

MORTGAGEE LETTER 2011-23

TO: ALL APPROVED MORTGAGEES, ATTENTION: Single Family Servicing Managers

SUBJECT: Unemployment Special Forbearance: Temporary Program Changes and Clarifications

The purpose of this Mortgagee Letter is to temporarily amend the Type I special forbearance program as it pertains to unemployed borrowers. This Mortgagee Letter is effective on August 1, 2011, and expires two years from the effective date of the Mortgagee Letter. On the expiration date, all guidelines pertaining to special forbearances revert to those described in Mortgagee Letters (MLs) 2000-05 and 2002-17…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

HUD Guidance to Mortgagees Working With FHA Borrowers Who are Disaster Victims:

Mortgagees are reminded that pursuant to Mortgagee Letter 2001-07, a 90-day moratorium on foreclosures is automatically imposed on FHA-insured properties in Presidentially Declared Disaster Areas. The effective date of the moratorium is the declaration date and the mortgagee must contact the Federal Emergency Management Agency (FEMA) to obtain a list of specific counties and their corresponding declaration dates.  This information can be found at: http://www.fema.gov/news/disasters.fema or by calling a local FEMA office. Additional information on Presidentially Declared Disaster Areas is found in Chapter 14 of HUD Handbook 4330.1, Rev-5, Administration of Insured Home Mortgages, restated most recently in Mortgagee Letter 05-33.

Mortgagees must also offer the FHA Type 1 Special Forbearance to eligible borrowers.  FHA Type 1 Special Forbearance provides relief to borrowers by suspending or reducing their mortgage payments for a period sufficient to allow them to recover from the cause of default.  Late fees are not to be assessed while the borrower is making timely payments.  Mortgagee Letter 2002-17 details the criteria for using FHA’s Type1 Special Forbearance. 

If a borrower does not qualify for a special forbearance, the mortgagee should review the borrower’s loan for the most appropriate loss mitigation tool, including but not limited to, a loan modification, partial claim, or FHA’s Making Home Affordable Modification Program (FHA-HAMP).  Any questions or clarifications regarding this guidance should be directed to HUD’s National Servicing Center at: 877-622-8525.

Read HUD Handbook 4330.1, Rev-5, “Administration of Insured Home Mortgages” on-line at: http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh/4330.1

All FHA Mortgagee Letters can be found on-line at: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING - FEDERAL HOUSING COMMISSIONER

April 28, 2011

Mortgagee Letter 2011-19

TO: ALL APPROVED MORTGAGEES

SUBJECT: Financing of Transaction Costs for Real Estate Owned Properties (REO) Purchased under FHA $100 Down Sales Incentive

This Mortgagee Letter provides Federal Housing Administration (FHA) guidance regarding the financing of homebuyer transaction costs for homebuyers who acquire HUD Real Estate Owned (REO) single-family properties under a specially-authorized sales incentive that requires only a $100 minimum cash investment. Homebuyer acquisition costs that may be financed for eligible homebuyers are limited to Upfront Mortgage Insurance Premiums (UFMIP)...

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

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FHA Industry Conference Call and Webinar. SAVE THE DATE!

Thursday, May 12, 2011 – FHA Industry Conference Call and Webinar. The FHA Office of Lender Activities and Program Compliance will be conducting an industry conference call and webinar on Thursday, May 12, 2011 from 2:00 to 3:30 PM Eastern Time. There will be a brief presentation on policy updates followed by ample time for questions and answers. Mark your calendars now to join us! Watch this listserv for upcoming webinar registration and conference call in information.

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New HCS Guidance for HUD Approved Housing Counseling Agencies:

As of today, you will notice changes in the Housing Counseling System (HCS) particularly in the Agency Tab. There are now two types of Agency searches to select in the Agency Tab; “Basic” and “Advanced”. The Basic Search allows you to quickly identify a specific agency and access their profile. The Advanced search allows you to list multiple agencies assigned to your organization utilizing a variety of filters.  The resulting list will provide 3 custom spreadsheets you can view and are exportable;  Basic, Contact and Review.

·         Basic – general information on the agencies listed

·         Contact – contact information on the agencies including key personnel

·         Review – information related to past and scheduled Reviews HUD conducted on your agencies

I hope you will find these changes to be an improvement to the HCS and beneficial to meeting your needs.  The processing time is greatly improved reducing the time it takes to display results.

Please direct questions or comments to your respective HUD point of contact or email Housing.Counseling@hud.gov by directly responding to this email.

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING FEDERAL HOUSING COMMISSIONER

April 5, 2011

MORTGAGEE LETTER 2011-16

TO: ALL APPROVED MORTGAGEES, ALL HUD-APPROVED HOUSING COUNSELING AGENCIES, ATTENTION: SINGLE FAMILY SERVICING MANAGERS

SUBJECT: Home Equity Conversion Mortgage - Rescission of Mortgagee Letter 2008-38 - Borrower’s recourse for repayment of HECM debt

On December 5, 2008, the U.S. Department of Housing and Urban Development (HUD) issued Mortgagee Letter (ML) 2008-38 to provide clarification to mortgagees regarding the requirements for repayment and termination of a Home Equity Conversion Mortgage loan…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ view the 2011 letters and click on the letter of your choice. Mortgagee Letters from previous years can be found on the same page.

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HUD NOFA General Section Published:

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5500-N-01]

TITLE: Notice of HUD’s Fiscal Year (FY) 2011 Notice of Funding Availability (NOFA) Policy Requirements and General Section to HUD’s FY2011 NOFAs for Discretionary Programs

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of HUD’s FY2011 NOFA Policy Requirements and General Section to HUD’s FY2011 NOFAs for Discretionary Programs (notice).

SUMMARY: This notice provides prospective applicants for HUD’s competitive funding with the opportunity to become familiar with the General Section of HUD’s FY2011 NOFAs, in advance of publication of any FY2011 NOFAs. It also describes HUD’s policy priorities based on its Strategic Plan for FY2010-2015, as well as submission requirements for FY2011…

To read this notice in its entirety please visit: http://portal.hud.gov/hudportal/documents/huddoc?id=2011gensec.pdf