FHA Imposes Window on Mortgage Insurance Claims

The Federal Housing Administration yesterday proposed a rule that would limit 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.

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.