ABA Analysis Addresses Proposed FHA Insurance Claim Window

ABA today issued a bank members-only staff analysis of the Federal Housing Administration’s proposed rule limiting the window under which an FHA-approved lender would be able to file a mortgage insurance claim. Under the proposal, lenders would be required to file a claim within three months of securing title to a home post-foreclosure or after selling it to a third party. ABA’s analysis covers other timing requirements under the proposal.

The FHA said that many lenders have waited to file large batches of claims, straining FHA resources to process them and making it more difficult to forecast financials for the Mutual Mortgage Insurance Fund that protects FHA mortgagees.