FHA extends face-to-face waivers until after election

The Federal Housing Administration has extended temporary, partial exemptions from requirements about having meetings with certain borrowers until after voters go to the polls in November. The interim rules were first put in place due to CDC rules about social distancing in early 2020.

The extension of the waivers previously scheduled to expire May 31 of this year until next January raises questions about when and if a proposed successor policy more permanently updating "face-to-face" meeting directives will move forward.

While not guaranteed, it's still possible that the arm of the Department of Housing and Urban Development that insures certain home loans will be able to move forward on the proposal around meetings with distressed mortgage borrowers before Election Day.

The waivers will be extended through Jan. 1, 2025, unless a final rule amending existing policies and a related mortgagee letter on handbook update "become effective sooner," the administration said in an information bulletin released last week.

If the proposed policy goes through, mortgage servicers would continue to have some of the flexibility they've had since the pandemic in scheduling meetings with seriously-delinquent borrowers who take out FHA insured loans.

Anticipating that the use of flexible communication methods would broaden mortgage companies ability to reach borrowers who are further away, the proposal does also remove at least one previous exemption.

Borrowers who aren't living in the property or who don't have mortgaged land within 200 miles of their lender/servicer or branch office previously were exempt. They would no longer be under the new proposal that allows more electronic communication.

The FHA has extended the waivers four times since the original implementation period.

They were originally set to start March 13, 2020 and end a year later, then the deadline was moved out another 12 months to Dec. 31, 2022. Next, the FHA moved the expiration date to Dec, 31, 2023, before prolonging it the two subsequent times previously mentioned.

Outside of certain exemptions like the 200-mile rule, pre-pandemic servicers had to meet face-to-face with borrowers or make a reasonable effort to do so when obligors missed three payments.