FHA Servicing Guidance
The FHA's National Servicing Center (NSC) helps homeowners by working with lenders to find creative solutions to avoid foreclosure. NSC also provides direction and training to lenders and housing counseling agencies to enhance their assistance to FHA homeowners.
For assistance, call toll-free (888) 297-8685, email hsg-lossmit@hud.gov, or write to us at:
Department of Housing and Urban Development
National Servicing Center
301 NW 6th Street, Suite 200
Oklahoma City, OK 73102
Relief Options for FHA Loans - (Top)
To assist homeowners falling behind on an FHA loan, servicing lenders should be aware of the following information:
- If the borrower's home was damaged or their income reduced because of a hurricane, tornado, flood, wildfire, or other natural or man-made event and their home or job is in an area that the President declared a disaster area, a lender can't start foreclosure for 90 days.
- If the borrower or their spouse is on active military duty, they may qualify for a reduction in their interest rate that will reduce their payments. Read more about the Servicemembers Civil Relief Act (formerly known as the Soldiers' and Sailors' Civil Relief Act of 1940).
FHA Foreclosure Moratoriums - Case Specific Foreclosure Holds - (Top)
Lenders may receive notices from the Department requiring a temporary hold on foreclosure for the loans listed. This action, when taken, is necessary to allow sufficient time for HUD to complete its review of the subject loans relative to Predatory lending or other issues.
Upon completion of the individual reviews, HUD will notify lenders that the foreclosure process may continue. This release letter will state that foreclosure must be commenced (or recommenced) within 90 days of the date of the release letter. Please note that this is similar to suspensions resulting from bankruptcy actions.
Attorney Fee Reimbursement - All Moratoriums and Foreclosure Holds
For attorney fee reimbursement, HUD will treat the foreclosure suspensions required by all moratoriums and/or foreclosure holds similar to the suspensions resulting from bankruptcy actions. Mortgagees may claim the actual attorney fees incurred, up to a maximum of 75% of HUD's Attorney Fee Schedule for a foreclosure that was not completed due to a moratorium. For the foreclosure action that is completed, mortgagees may claim their actual attorney fees up to the maximum amount noted in HUD's Attorney Fee Schedule (see Mortgagee Letter 05-30, 01-19 or 98-26 depending on the date and type of legal action taken).
Specific Moratoriums
Servicing Extensions and Variances - (Top)
Loss mitigation extensions and variance requests are processed by the NSC's Tulsa office. This doesn't include extension or variance processed by other HUD divisions, such as REO or M&M contractors. Please fax loss mitigation extension or variance requests to (918) 292-8992.
Treble Damages for Failure to Engage in Loss Mitigation - (Top)
HUD's Fiscal Year (FY) 1999 budget granted authority to impose a penalty of three times the amount of insurance benefits claimed by the mortgagee with respect to any mortgage for which the mortgagee had a duty but failed to engage in appropriate loss mitigation activities. The penalty has been codified at Title 12 of the US Code, Section 1735f-14. The text reads in part:
"...In the case of mortgagee's failure to engage in loss mitigation activities, as provided in section 536(b)(1)(I)[12 USCA Section 1735f-14(b)(1)(I)], the penalty shall be in the amount of three times the amount of any insurance benefits claimed by the mortgagee with respect to any mortgage for which the mortgagee failed to engage in such loss mitigation actions."
The Final Rule was published April 26, 2005. Further information about treble damage implementation will be provided in a future Mortgagee Letter.
