MBA requests FHA to revise penalities in foreclosure timeline
October 26th, 2010
As discussed in HousingWire, the MBA submitted a letter to the FHA requesting a revision of the penality structure in the foreclosure timeline.
MBA wants FHA to revise penalties in foreclosure timeline
The Mortgage Bankers Association wants the Federal Housing Administration to revise the penalty structure for mortgage servicers who fail to begin foreclosure proceedings by the federal deadline.
MBA officials want the FHA to implement a "more equitable" penalty for missing the deadline to make it more attractive to service FHA loans.
In a letter to David Stevens, assistant secretary for housing, and commissioner of the Department of Housing and Urban Development, the MBA said servicers are already squeezed by the six-month deadline to initiate foreclosures, which has been pared down over the years from a previous deadline of 12 months.
"This change has provided HUD with significant cost savings, but has increased the risk for servicers that must now manage loss-mitigation and foreclosure timelines concurrently," according to the MBA.
The association wants a maximum penalty of 30 days of interest for each month the initiation of foreclosure is delayed because of the "increased complexity of managing both the loss-mitigation and foreclosure timeframes and their competing objectives."
HUD currently curtails debenture interest when a servicer doesn't begin a foreclosure within six months of default. The MBA feels the penalty is arbitrary and in need of revision.
To view the online article, please click here
To view the letter, please click here
About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with approximately 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.