The American Bankers Association joined the Mortgage Bankers Association in a comment letter to the Department of Housing and Urban Development last week offering feedback on the Federal Housing Administration’s single-family loan sale program. The letter came in response to an advanced notice of proposed rulemaking as FHA looks to make the program permanent.
Through the program, eligible single-family mortgage loans are assigned to FHA in exchange for claim payment, and mortgage notes are sold competitively to maximize recoveries and strengthen the FHA Mutual Mortgage Insurance Fund. The associations welcomed FHA’s efforts to make the program permanent, and emphasized the importance of striking “an appropriate balance between protecting the Fund, the interests of communities and the need to ensure borrowers are fairly treated.”
Among other things, the groups recommended that FHA establish a regular schedule of loan sales; maintain consistent eligibility criteria across sales and lock qualified loans as of a specific date; and expand loan eligibility criteria.