FHA Extends More COVID-19 Reverse Mortgage Relief, FHA Connection Goes Offline for Maintenance
The Federal Housing Administration (FHA) announced Tuesday that even after a series of extensions issued last week regarding relief for reverse mortgage borrowers affected by the COVID-19 coronavirus pandemic, another form of relief requires additional relief. extension to allow industry partners to take advantage of the flexibility of the self-employment verification and rental income verification guidelines for the Title II single-family term mortgage and Title II mortgage programs home equity conversion (HECM).
The move follows several additional steps taken late last week by federal government departments to provide relief to populations who have taken advantage of several different forms of mortgage relief without such relief, in the hope of avoiding negative consequences for vulnerable populations suffering from unstable housing situations.
Additionally, the FHA announced that its FHA Connection (FHAC) portal – which provides FHA-approved lenders and business partners with direct, secure online access to the US Department of Housing and Urban Development (HUD) computer systems – will be taken offline at the end. this week to undergo the necessary maintenance.
Extension of the employment verification exemption
In the 2021-16 Mortgage Credit Letter (ML) released on Tuesday, the FHA detailed that its previous relief for borrowers related to employment verification and other forms like rental income will be extended to grant a deadline additional to borrowers and mortgages who need it before the situation returns to normal.
“Due to restrictions imposed by the national COVID-19 emergency and in accordance with guidelines from state and local governments, many businesses across the country have had to reduce the scope of their operations or close their doors entirely,” it read. part in the new ML. “Mortgage lenders therefore face an additional challenge when trying to determine the income stability of independent borrowers and borrowers who depend on receiving rental income.”
This made it necessary to extend this relief further, according to the ML.
“In recognition of these and other challenges that mortgage lenders face in these unprecedented times, the FHA is temporarily updating its income requirements for independent borrowers and borrowers who rely on collecting rental income to claim. to an FHA insured mortgage, ”the letter explains.
The FHA is also expanding the relief applied to its 203K rehab program in the same ML, which only affects the 203K escrow administration guidelines and will not affect the HECM program.
FHAC will be temporarily offline from Friday
The FHA also revealed in a new information notice that the FHAC will be taken offline starting this Friday for maintenance, during a planned outage that is expected to persist for part of next week’s work week.
“(FHAC) will not be available from Friday, July 2, 2021 at 10:00 p.m. (Eastern Time) until Tuesday, July 6, 2021 at 8:00 a.m. (Eastern time) for upgrades and maintenance of the system “, states the notice in part.
As part of this planned systems failure, 13 different functions will not be available to mortgage creditors, including the computerized housing underwriting management system (CHUMS), the credit alert verification report system (CAIVRS) , Claims, Housing Advisory System (HCS), Lender Electronic Assessment Portal (LEAP), Loan Review System (LRS), Neighborhood Watch, Multi-Family Premiums, Insurance System Single Family (SFIS), Single Family Failure Monitoring System (SFDMS), Single Family Premium Collection Subsystem – Periodic (SFPCS) -P), Single Family Collection Subsystem – Upfront (SFPC-U) and title I.
“These applications are expected to resume operations at FHAC on Tuesday, July 6, 2021 at 8:00 a.m. (Eastern Time),” the advisory said. “Access to the FHA TOTAL Mortgage Scorecard (Open Technology to Approved Lenders) by approved Automated Underwriting System (AUS) providers will not be affected by this outage. “
In the original reverse mortgage side employment rechecking guidelines published in ML 2020-24 from July 2020, an annual pay stub or direct electronic income verification for the immediately preceding pay period the date of the note or bank statement showing the direct deposit of the borrower’s employment for the pay period immediately preceding the date of the note will be accepted.
Mortgageors do not need to provide a new employment verification within 10 days of disbursement, as described in sections 3.8 and 3.9 of the HECM Financial and Property Assessment Guide, provided the mortgagee is not aware of a loss of employment by the borrower and has obtained any of the documents described.
The employment rechecking guidelines were further extended in ML 2021-06 last February for cases closed by June 30, 2021. This date was not moved to the end of September in this latest round of guidelines. For rental income guidelines, the FHA previously described the difficulty some people had in documenting less typical income sources, such as rental properties.
“Mortgage lenders therefore face an additional challenge when trying to determine the income stability of independent borrowers and borrowers who depend on collecting rental income,” it reads in part. “In recognition of these and other challenges that mortgage lenders face in these unprecedented times, the FHA is temporarily updating its income requirements for independent borrowers and borrowers who depend on collecting rental income for themselves. qualify for an FHA insured mortgage. “