FHA Mortgages

FHA Extends Extra COVID-19 Reverse Mortgage Reduction, FHA Connection Going Offline for Upkeep

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The Federal Housing Administration (FHA) announced Tuesday that even after a series of extensions issued last week regarding relief for reverse mortgage borrowers affected by the COVID-19 coronavirus pandemic, another was issued Form of relief requires extension to provide industry partners with additional flexibility to use Self Employment Review and Rental Income Review Guidelines for Single Family Title II Forward Mortgage and Home Equity Conversion Mortgage (HECM) programs.

The move follows on from several additional measures taken by federal government ministries late last week to relaunch populations who have received several different forms of mortgage relief without such relief in hopes of negative consequences for endangered population groups with unstable living situations or

In addition, the FHA announced that its portal, FHA Connection (FHAC), which provides FHA-approved lenders and business partners with direct, secure online access to the U.S. Department of Housing and Urban Development (HUD) computer systems, is ending will be taken offline this week to undergo the necessary maintenance.

Extension of the facilitation of proof of work

In Mortgagee Letter (ML) 2021-16, released Tuesday, the FHA stated that its previous borrower relief on employment verification and other forms such as rental income will be extended to provide additional time for borrowers and mortgage holders in need to give before the the situation normalizes again.

“Due to the restrictions imposed by the national COVID-19 emergency and in accordance with the guidelines of state and local authorities, many companies across the country have had to reduce the scope of their operations or close their doors completely,” the new ML says in part. “As a result, mortgage holders face an additional challenge when trying to assess income stability for self-employed borrowers and for borrowers who rely on rental income.”

This made the additional extension of this relief necessary, according to the ML.

“Recognizing these and other challenges mortgage holders face in these unprecedented times, the FHA is temporarily updating its income requirements for self-employed borrowers and borrowers who rely on rental income to qualify for an FHA-insured mortgage.” explained.

The FHA is also expanding the facilities for their 203K rehabilitation program in the same ML, which only affects the 203K trust administration policies and does not affect the HECM program.

FHAC will be temporarily offline from Friday

FHA also announced in a new briefing that FHAC will go offline for maintenance starting this Friday, in a planned outage that is expected to last until part of the work week next week.

“(FHAC) will be unavailable for system upgrades and maintenance from Friday, July 2, 2021 10:00 p.m. (East) through Tuesday, July 6, 2021, 8:00 a.m. (east) for system upgrades and maintenance,” it says the communication part.

As part of this planned system outage, 13 different features will be unavailable to mortgage borrowers, including Computerized Homes Underwriting Management System (CHUMS), Credit Alert Verification Reporting System (CAIVRS), Accounts Receivable, Housing Advisory System (HCS), Lender Electronic Assessment Portal ( LEAP), the Loan Review System (LRS), Neighborhood Watch, multi-family premiums, the Single Family Insurance System (SFIS), the Single Family Default Monitoring System (SFDMS), the Single Family Premium Collection Subsystem – Periodic (SFPCS.) -P) , the Single Family Collection Subsystem – Upfront (SFPC-U) and Title I.

“These applications are to resume operations in the FHAC on Tuesday, July 6, 2021 at 8:00 a.m. (East),” the statement said. “Access to the TOTAL Mortgage Scorecard of the FHA (Technology Open To Approved Lenders) by approved providers of automated underwriting systems (AUS) is not affected by this failure.”

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In the original reverse mortgage side employment reconsideration guidance issued in ML 2020-24 of July 2020, a pay slip for the current year, or a direct electronic check of income for the payment period immediately prior to the memorandum date or a bank statement showing the direct payment from the borrower’s employment relationship for the payment period immediately preceding the termination date is accepted.

Mortgage holders are not required to re-submit employment confirmation within 10 days of the disbursement, as described in sections 3.8 and 3.9 of the HECM’s Guide to Financial Valuation and Property Expenses, provided the mortgagee is unaware of a job loss by the borrower and has received one of the documents described.

The employment reconsideration guidelines were expanded in ML 2021-06 last February for cases closed on or before June 30, 2021. This date has not been postponed to the end of September in this final guideline round. For the Guide to Rental Income, FHA previously described the difficulty some people had in documenting less typical sources of income, e.g. B. from rental properties.

“Mortgages therefore face an additional challenge when trying to determine income stability for self-employed borrowers and for borrowers who rely on rental income,” says ML 2021-07 in part. “Recognizing these and other challenges mortgage holders face in these unprecedented times, the FHA is temporarily updating its income requirements for self-employed borrowers and borrowers who rely on rental income to qualify for an FHA-insured mortgage.”

Read ML 2021-16 and FHA INFO # 21-51 on the HUD.

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