The Federal Housing Administration (FHA) recently announced that it is expanding and enhancing its set of loss mitigation options used to help borrowers struggling to make mortgage payments on their FHA-insured mortgages. The enhancements extend FHA’s COVID-19 loss mitigation options to all eligible borrowers who fall behind on their mortgage payments, regardless of the cause of their delinquency. The updates also enable mortgage servicers to use the full 30 percent of FHA’s partial claim option, rather than the previously permitted 25 percent, to help maximize the number of borrowers able to retain their homes. The mandatory effective date of the changes is April 30, 2023, but mortgage servicers may begin offering these options to borrowers immediately.
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