Improving FHA Foreclosure Processes

first_img conveyance Federal Housing Administration FHA Fines and Penalties Foreclosure REO Servicing 2018-03-03 David Wharton Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago About Author: David Wharton Improving FHA Foreclosure Processes The Best Markets For Residential Property Investors 2 days ago Home / Daily Dose / Improving FHA Foreclosure Processes Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago in Daily Dose, Featured, Foreclosure, Government, Headlines, Journal, News, REO, Servicing Data Provider Black Knight to Acquire Top of Mind 2 days ago Share Save  Print This Postcenter_img Sign up for DS News Daily Demand Propels Home Prices Upward 2 days ago Tagged with: conveyance Federal Housing Administration FHA Fines and Penalties Foreclosure REO Servicing The Week Ahead: Nearing the Forbearance Exit 2 days ago Related Articles Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days ago Previous: The Best and Worst States for Property Taxes Next: Tiny Homes Could Help the Homeless Data Provider Black Knight to Acquire Top of Mind 2 days ago A new brief released by the Urban Institute explores ways to improve Federal Housing Administration (FHA) foreclosure timelines and conveyance processes so as to drive down costs and make things more efficient. The brief is the third in a series produced by the Mortgage Servicing Collaborative (MSC), convened by the Housing Finance Policy Center at the Urban Institute.This latest brief delves into the costs associated with servicing non-performing FHA loans, including the expenses related to both foreclosures and conveyance of the properties to HUD. The brief hinges on two notions: 1) discovering whether servicing non-performing FHA loans is more expensive than servicing non-performing GSE loans, and 2) discovering whether the FHA’s current foreclosure and conveyance processes create extra expenses.The study found that, indeed, foreclosing on FHA loans is “orders of magnitude more expensive than servicing loans backed by the GSEs”—three times as expensive, in fact, on average, as reported by servicers. The brief targets two major causes for these increased expenses: 1) “an inflexible foreclosure timeline and penalty system that does not improve outcomes,” and 2) “a property conveyance process that slows down resolution, which causes properties to remain vacant longer, which can adversely affect neighborhoods and increase maintenance and repair costs.”One of the primary drivers of these costs is the “interim penalties associated with failure to meet the FHA’s milestones in the foreclosure timelines,” according to data from MSC servicer members. According to the Urban brief’s data analyzed for 2015 and 2016 FHA claims, “43 percent of insurance claims received an interest curtailment penalty because of missed first legal action or reasonable diligence milestones.” As the Urban brief points out, the GSEs “ use milestones to track progress toward foreclosure, but missing a milestone in and of itself does not trigger a penalty.”The brief also found the FHA fees themselves to be “onerous.” According to the data, “the average first legal interest curtailment for loans that missed this deadline was $5,360 per loan, roughly 3 percent of an average FHA loan amount of $175,000.”Urban’s research also found high penalties when it came to conveyance. According to cited MSC servicer data, “the average per loan property preservation cost for FHA properties that were conveyed was $8,819, compared with $2,113 for nonconveyance routes.” For conveyance liquidations, surveyed servicers reported an average property preservation loss of $4,179. This works out to “ a loss rate of 47 percent on the $8,819 in expenses.”Urban’s brief recommends that the FHA change its foreclosure timelines to enact penalties and timelines that are more closely aligned with actual delays in the process. They suggest these changes could be enacted through a simple administrative rule change. They also recommend expanding the availability of conveyance alternatives and exploring other possibilities to improve the process.You can read the full Urban Institute brief by clicking here. March 3, 2018 3,751 Views Subscribelast_img read more

NA appoints first female president

first_imgShirley Ryder was installed as the NA’s 112th president at its annual conference. Mrs Ryder succeeds Colin Fulcher, who runs the Lilleys Bakery chain in Essex. The new president elect is Mike Holling, retail operations manager of Birds of Derby. Mrs Ryder is the youngest president and only woman to wear the chain of office: “We’ve done it ladies, we have reached the top, she said.”last_img