FHA Publishes Updates to Single Family Housing Handbook 4000.1

The Federal Housing Administration (FHA) on Tuesday announced that it has updated the Single Family Housing Policy Handbook 4000.1 in a host of sections, in an effort to include enhancements and revisions to existing guidance as well as edits of a technical variety. In most cases, this newly-added language augments and enhances existing policy according to an announcement by FHA.

“FHA remains committed to making it easier for mortgagees to conduct business by maintaining and enhancing Handbook 4000.1 with regularly scheduled updates to ensure it remains the comprehensive source of policy guidance for single family mortgage originators, servicers, and other stakeholders,” FHA said in its announcement of the updates.

The most applicable updates to the reverse mortgage industry are centered on the handbook’s Section V, “Quality Control, Oversight and Compliance.”

In this section, the handbook incorporates policies requiring mortgagees not approved for eCaseBinder (eCB) submission through FHA Connection (FHAC) to use the FHA Catalyst: Case Binder Module to submit both Single Family forward and Home Equity Conversion Mortgage (HECM) case binders that were requested through the Loan Review System (LRS) for post-endorsement technical review.

The additions to this section also incorporate policy guidance on the number of Early Payment Defaults that require an appraisal field review, while also clarifying property and appraisal Quality Control review requirements to align with Property Acceptability Criteria and Appraiser and Property Requirements for Title II forward and HECM mortgages.

Section IV regarding “Claims and Disposition” clarifies alternative claim review documentation that the U.S. Department of Housing and Urban Development (HUD) will accept as proof of tax payment from a tax monitoring service. Sections II and III, “Origination through Post-Closing/Endorsement” and “Servicing and Loss Mitigation,” respectively each incorporate guidance issued in Mortgagee Letters (MLs) during the Biden administration — specifically MLs 2021-3, 2021-14 and 2021-15 — regarding forbearance policies and other loss mitigation options initially made available during the COVID-19 coronavirus pandemic.

In May, an FHA official indicated to the reverse mortgage industry that all the previous FHA HECM program guidance handed down via ML might be considered voluminous for new and existing industry participants, and that FHA was looking at ways in which to consolidate all previous HECM program guidance into the Single Family Housing 4000.1 Handbook.

This would allow industry participants to reference the Single Family Handbook for a more holistic perspective on reverse mortgage industry policy guidance from the government, according to Principal Deputy Assistant Secretary (PDAS) for the Office of Housing and the FHA Lopa P. Kolluri.

Read details of the handbook update at FHA.

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