The United States Department of Housing and Urban Development (HUD) has expanded the Federal Housing Administration (FHA) COVID-19 Recovery Loss Mitigation Options to include all borrowers in default or imminent default, regardless of whether they experienced financial hardship due to the COVID-19 National Emergency or obtained a COVID-19 forbearance. This applies to both owner-occupants and non-owner-occupants. The COVID-19 Recovery Partial Claim Amount has also increased to 30% of the borrower’s unpaid principal balance as of the date of default of the first partial claim.
The newly expanded and revised COVID-19 Recovery Options are available until October 30, 2024, and must be completed by February 27, 2025. Please note that some policies in the Mortgagee Letter (ML) do not apply to Reverse Mortgages.
Servicers are required to evaluate all eligible borrowers for the COVID-19 Recovery Home Retention Options, COVID-19 PFS, and COVID-19 DIL. Servicers must also review borrowers who were on a COVID-19 forbearance plan and those who are now exiting forbearance. Take advantage of these updated COVID-19 Recovery Loss Mitigation Options to help keep your home.
Benefits of Expanded FHA Covid-19 Recovery Loss Mitigation Options
The expanded FHA COVID-19 Recovery Loss Mitigation Options offer numerous benefits for borrowers, including:
- Expanded eligibility: All borrowers who default, regardless of whether they experienced financial hardship due to the COVID-19 National Emergency or obtained a COVID-19 forbearance, are now eligible for assistance.
- Increased Partial Claim Amount: The COVID-19 Recovery Partial Claim Amount has increased to 30% of the borrower’s unpaid principal balance as of the date of default of the first partial claim.
- More time to take advantage of assistance: The newly expanded and revised COVID-19 Recovery Options are now available until 2024, providing borrowers with ample time to explore their options.
- Servicer evaluation: Servicers are required to evaluate all eligible borrowers for the COVID-19 Recovery Home Retention Options, COVID-19 PFS, and COVID-19 DIL. Servicers must also review borrowers who were on a COVID-19 forbearance plan and those who are now exiting forbearance, ensuring that all eligible borrowers have the opportunity to receive assistance.
- Protection of home ownership: By taking advantage of these updated COVID-19 Recovery Loss Mitigation Options, borrowers can better protect their home ownership and avoid foreclosure.
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If you are facing foreclosure, a sheriff sale, or investigating your eligibility for a loan modification, or if you believe that your lender or their representatives have violated your rights, it is critical to be proactive. Ira J. Metrick has developed a reputation as a staunch advocate of homeowner rights and is recognized as one of the top foreclosure defense attorneys in New Jersey. Contact us today to discuss your case.
