FHA Makes Concessions for Those Impacted by Shutdown

FHA Makes Concessions for Those Impacted by Shutdown

10/15/2013 BY: CARRIE BAY

The Federal Housing Administration (FHA) called on all approved mortgagees and lenders to be sensitive to the financial hardships some borrowers are facing as a result of the federal government shutdown, including borrowers subject to furlough, layoff, or a reduction in income.

In a notice to its industry partners, FHA said it expects all approved mortgagees and lenders to “make every effort” to communicate with and assist affected borrowers “to the greatest extent possible” by extending informal forbearance plans and fully evaluating borrowers for

available loss mitigation options to avoid foreclosure whenever possible.

“These dedicated public servants, through no fault of their own, are now forced to find a way to meet their ongoing financial obligations without their usual salaries,” saidFHA Commissioner Carol Galante in a letter to FHA-approved lenders and mortgagees. “In many instances these are the same employees who have already lost pay during recent sequestration related furloughs.”

The agency is also strongly encouraging all approved mortgagees and lenders to waive late fees for affected borrowers and to suspend credit reporting on borrowers nationwide who have been affected by the shutdown.

“FHA is working to ensure that the hard-won improvement in the housing market is not substantially compromised by the government shutdown and, in particular, that responsible FHA borrowers impacted by the shutdown receive the support they need,” Galante said.

FHA joins Fannie MaeFreddie Mac, and the Veterans’ Administration in urging lenders to take action to protect those federal workers impacted by the shutdown.

 

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