The Federal Housing Administration has extended by six months the compliance deadline for a new rule removing the face-to-face meeting requirement for certain mortgagees amid concerns about how the policy would be implemented.
Earlier this year, FHA issued a final rule that made permanent a pandemic-related rule that waives the Department of Housing and Urban Development’s requirement for mortgagees to meet in person with borrowers who are in default on their mortgage payments. The agency originally set a Jan. 1, 2025, compliance date for the rule and published a draft mortgagee letter outlining how the policy would be implemented. However, the American Bankers Association and other associations warned that the guidance outlined in the letter would make the process more onerous as it was “vague and operationally infeasible.”
The associations urged FHA to delay the compliance deadline so the draft letter could be amended and reproposed. They also requested an extension of the temporary waiver that has been in place for face-to-face meetings since the pandemic. FHA agreed to push back the compliance deadline and waiver to July 1, 2025. The agency also plans to publish a new mortgagee letter.
“This extension is intended to minimize disruption to mortgagees by enabling them to maintain existing operations while working towards compliance with the new requirements, which will include those in the forthcoming [mortgage letter],” FHA said.
