Transmittal: Handbook (09/30/16)

Transcription

1 FHA SINGLE FAMILY HOUSING POLICY LIBRARY / : FHA Single Family Housing Policy Handbook / : FHA Single Family Housing Policy Handbook / Transmittal: Handbook (09/30/16) Transmittal: Handbook (09/30/16) Issued: September 30, 2016 Effective Date: Multiple; See Below Special Attention of: All FHA approved Mortgagees All Direct Endorsement Underwriters All FHA Roster Appraisers All FHA Roster Inspectors All FHA approved 203(k) Consultants All HUD approved Housing Counselors All HUD approved Nonprofit Organizations All Governmental Entity Participants All Real Estate Brokers All Closing Agents 1. This Transmits: Handbook , FHA Single Family Housing Policy Handbook. 2. Explanation of Materials Transmitted: This revision to the FHA Single Family Housing Policy Handbook, or Handbook (Handbook), is being published to update existing sections. Below is a list of content updates being made to the Handbook: Handbook Section Handbook Changes Page Number(s) Asterisks (*) in document identify items with effective dates that differ from the September 30, 2016 effective date. Refer to Section 3 below for more information. Section I Doing Business with FHA I.B.2.b.iii 203(k) Consultants Application and Approval Process Incomplete Application; I.B.4.b.vi Nonprofits and Governmental Entities Application and Approval Process Incomplete Application; I.B.4.b.ix(C) Nonprofits and Governmental Entities Recertification Incomplete Recertification Application I.B.4.a.i(A) HUD Homes Provided additional guidance for prospective 203(k) Consultants and nonprofit and Governmental Entities who submit incomplete applications. Updated guidance for nonprofit programs purchasing HUD Homes. 67, 92, Section II Origination through Post Closing/Endorsement II.A.1.a.i(A)(4)(c)(vi) Single Use of Signature Incorporated change as announced in E SIGN waiver, dated May 19, /10

2 II.A.1.a.i(E)(1)(a)(iii) Property Assessed Clean Energy; II.A.1.a.iii(B)(6)(e) Additional Requirements When Ordering an Appraisal; II.A.1.b.iv(A)(6) Property Assessed Clean Energy II.A.4.a.iii(A)(1) Automated Underwriting System Data Entry Requirements Mortgagees; II.A.4.d.iii(G)(2) Interested Party Contributions (TOTAL) Standard; II.A.5.c.iii(G)(2) Interested Party Contributions (Manual) Standard; II.A.5.d.vii(B) Calculating Total Mortgage Payment; II.A.6.a.viii(A) Monthly Escrow Obligations; II.D.12.d.iv Property Assessed Clean Energy II.A.1.a.iii(B)(6) Ordering Appraisals II.A.1.a.iii(B)(7) Appraisal Effective Date; II.D.1.a Information Required before Commencement of the Appraisal II.A.1.b.ii(B)(2)(a) Other Parties to the Transaction Standard II.A.1.b.iv(A)(1)(e) Required Flood Insurance Amount II.A.1.b.iv(A)(7) Dwelling Unit Limitation; II.A.5.d.xii(C) Dwelling Unit Limitations; II.A.8.a.iii(A) Dwelling Unit Limitation II.A.3.a.ii(F) Requirements for Living Unit; II.D.3.e Appliances Incorporated PACE guidance to reflect ML Removed redundant language in Ordering Appraisals section. Clarified that the effective date of the appraisal cannot be a date before FHA case number assignment and provided additional guidance on the use of conventional or other government guaranteed appraisals. Added Closing Agent and title company to list to make consistent with Section V.A.3.f.i(A) Ineligible Participants Origination and Underwriting Reviews Standard. Removed and revised language to make consistent with 24 CFR a. Moved section from II.A.5.d.xii(C) to II.A.1.b.iv(A)(7), and revised to clarify that guidance applies to Governmental Entities or nonprofit Borrowers. Subsequent heading numbers were renumbered. Updated heading in II.A.8.a.iii(A) for consistency. Clarified definition, standard, and reporting requirements for appliances. 117, , , 177, 231, 306, 323, 341, , , 335, , /10

3 II.A.3.a.ii(P) Individual Residential Water Purification Systems; II.A.6.a.viii(A) Monthly Escrow Obligations; II.D.3.p.vi Individual Residential Water Purification Systems II.A.4.a.v Accept Risk Classifications Requiring a Downgrade to Manual Underwriting (TOTAL); II.A.4.b.iv(C) Undisclosed Mortgage Debt (TOTAL) II.A.5.d.ix(F)(1) Calculating Residual Income Added guidance for individual residential water purification systems. Clarified guidance for when mortgage debt requires a downgrade to manual underwriting. Clarified that total fixed payment should be part of residual income calculations , 341, , II.A.6.b.i Mortgage and Note Definitions Updated definition of Mortgage. 345 II.A.7.d.ii(C) Uniform Case Binder Stacking Order II.A.8.a.x(B) Maximum Mortgage Amount for Refinance Required Documentation II.A.8.a.xv(A)(2)(a) Initial Draw at Closing Standard 203(k); II.A.8.a.xv(A)(2)(b) Initial Draw at Closing Limited 203(k) II.A.8.a.xvi Data Delivery/203(k) Calculator II.A.8.d.vi(A)(2)(b)(i) Calculating Maximum Mortgage Amount Standard; II.A.8.d.vi(B)(3)(a) Calculating Maximum Mortgage Amount for Simple Refinance Transactions Standard II.A.8.d.vi(A)(1)(b)(i) Rate and Term Payment History Requirements (Manually Underwritten) Standard II.A.8.d.vi(B)(1)(b)(i) Simple Refinance Payment History Requirements (Manually Underwritten) Standard; Clarified requirement that, when applicable, Mortgagees must include Affiliated Business Arrangement disclosures in case binders. Removed unnecessary language in 203(k) Maximum Mortgage Amount for Refinance section. Amended origination fees and discount points as allowable disbursements at closing. Removed unnecessary lowest acquisition cost information and added credit for lead based paint stabilization. Removed language regarding UFMIP refund applying only when the Mortgage included financed UFMIP. Updated payment history requirements for No Cash Out Refinances , , 413, II.A.8.d.vi(C)(2)(b)(i) 3/10

4 II.A.8.d.vi(C)(2)(b)(i) Streamline Refinances Payment History Requirements Standard II.A.8.i.i New Construction Definitions II.A.8.n.iv(A) Processing of an Assumption Initiating Processing II.A.8.o.i(C)(2) Section 203(b) With Repair Escrow; II.A.8.o.vi(B) Section 203(b) With Repair Escrow; II.A.8.o.vi(C)(3) Section 203(b) With Repair Escrow; II.A.8.o.vi(D)(2) Section 203(b) With Repair Escrow II.A.8.o.v(B)(2) Investment Property Investor Buyer; II.A.8.o.vi(A)(3) Section 203(b) Investor Buyer II.A.9.c.iii Draw Inspection Fee II.D.3.c.iii(C)(7) Stationary Storage Tanks II.D.3.g Mechanical Components and Utilities II.D.3.g.iii Plumbing System Clarified that Properties less than one year old subject to a second sale are treated like existing properties. Replaced reference to outdated HUD 92210, and updated with instructions to notify HUD of assumptions via FHA Connection. Revised repair escrow amount to $10,000, in response to Final Rule Disposition of HUD Acquired Single Family Properties; Updating HUD s Single Family Property Disposition Regulations, published August 11, Updated headings to clarify that the section is relevant for an Investor Buyer rather than general investors. Updated draw inspection fee guidance to reflect ML Revised language about stationary storage tanks and MPR/MPS. Updated language for appraisal of mechanical components and utilities. Clarified language for appraisal of plumbing systems , 463, , Section III Servicing and Loss Mitigation III.A.1.l.ii(A) Termination of Mortgage Insurance III.A.2.a.i Mortgages in Delinquency or Default Definitions III.A.2.h.xii(A)(2) Reasonable Effort in Arranging a Face to Face Interview Clarified language on termination of mortgage insurance. Updated definition for consistency with the regulation. Clarified that the Mortgagee must send the request for an interview by certificate of mailing or certified mail III.A.2.i.iii(A) Borrower s Financial Information Added language regarding Borrower s financial information, including new sub sections on Living Expenses, Borrower Income, and Hardship /10

5 Hardship. III.A.2.i.viii Notice to Borrower after Loss Mitigation Review III.A.2.j.i HUD s Loss Mitigation Program Definitions III.A.2.j.iii HUD s Loss Mitigation Option Priority Waterfall III.A.2.k.iv(D)(2) Special Forbearance Unemployment Agreement Standard Added language regarding Mortgagee s Notice to the Borrower. Removed Informal and Formal Forbearances from definition of Loss Mitigation Options, since they are workout tools. Updated the Loss Mitigation Option Priority Waterfall table. Updated language on the date the SFB Unemployment Agreement expires III.A.2.k.v Loan Modification Added effective date language. 617 III.A.2.k.v(E)(7) Trial Payment Plans during Foreclosure; III.A.2.r.ii(C)(2) Terminating Foreclosure Proceedings for Loss Mitigation III.A.2.k.v(G) FHA HAMP Loan Modification Provisions; III.A.2.k.v(H) FHA Mortgage Insurance Coverage and MIP III.A.2.k.vi(D)(2) FHA HAMP Standalone Partial Claim III.A.2.k.vi(F) FHA HAMP Trial Payment Plans III.A.2.l.ii(C)(2) Disclosure Requirements for PFS Transactions III.A.2.p.iv Independent Third Party Providers III.A.2.r.i(D)(1)(c) Prohibition of Foreclosure due to Federal Law or Regulations III.A.2.r.i(G) Manufactured Housing Review; III.A.2.t.v(C)(1) Title Evidence for Manufactured Housing Standard III.A.2.r.ii(E)(2)(d)(ii) Delay Due to Bankruptcy Chapter 11, 12, or 13 Bankruptcy III.A.2.t.ii(C) Mortgagee Property Preservation and Protection Action Clarified language to indicate Mortgagee must suspend and/or terminate foreclosure action, depending on state law requirement, during Trial Payment Plan. Clarified language for FHA HAMP and FHA mortgage insurance coverage. Updated language for FHA HAMP Standalone Partial Claim. Added sections about FHA HAMP Trial Payment Plans. Removed bullet to reflect that PFS transactions are not reported to CAIVRS. Updated language for Independent Third Party Providers. Added language on how to report the status of the Defaulted Mortgage in SFDMS. Updated language regarding property classification and requirements for proper purging of title to align with Section II. Clarified mortgagee guidance for foreclosure actions during Chapter 11, 12, or 13 Bankruptcy. Clarified when Mortgagee is responsible for preserving and protecting Property and updated documentation requirements. 622, , /10

6 III.A.2.t.ii(C)(4)(c)(ii) Requests for Exceeding Property Preservation Allowances Required Documentation Renamed column for clarity. 693 III.A.3.c.iv(E) Deeds in Lieu of Foreclosure III.A.3.d.i(C) HUD s Loss Mitigation Program III.A.3.j.i(B)(1)(a) Interest Rate Cap Standard Renamed heading to Home Disposition Options, and added clarifying language. Removed items that were inaccurately listed as loss mitigation options. Updated language to reflect amendments to Servicemembers Civil Relief Act, signed on March 31, Section IV Claims and Disposition IV.A.1.a.vii(B)(2) FHAC Connection Standard; IV.A.2.d.i(A) CWCOT Processing Fee Exemption for Small Servicers Standard; IV.A.2.d.iv Submission of Claim Form Parts to HUD for CWCOT IV.A.1.a.vii(B)(6) Mortgagee Contact Information IV.A.1.b Title II Claims Claim Status IV.A.2.a.iv(B) Submission of Parts B, C, D, and E IV.A.2.e.iv Submission of Claim Form Parts to HUD for PFS; IV.A.2.e.v Extension of Time to Submit PFS Claim IV.A.2.f Claim Type 31 Special Forbearance IV.A.2.g Claim Type 32 Loan Modification; IV.A.2.h Claim Type 32 ** FHA HAMP Loan Modification Updated content to reflect that Claims Without Conveyance of Title (CWCOT) may now be filed via FHA Connection (FHAC). Re labeled section from paragraph (7) to paragraph (6) after deleting the previous paragraph (6) (Advice of Payment Letter) to reflect ML Clarified language about timeframe after which Mortgagee can view claim status, and about claims submitted via EDI. Updated claim filing guidance to reflect ML Corrected claim requirements relative to PFS claims and removed guidance for extension of time to submit PFS claims. Clarified SFB Unemployment incentive procedures. Separated Claim Type 32 Loan Modification into two sections; the first addresses regular Loan Modifications and the second addresses FHA HAMP Loan Modifications. Clarified incentive procedures in both sections. 823, 862, IV.A.2.i Claim Type 33 ** FHA HAMP Partial Claim Clarified FHA HAMP Partial Claim incentive and insurance benefits procedures. 6/10 869

7 procedures. IV.A.3.e Advice of Payment and Title Approval IV.A.4.b.ii(B)(2) Reacquisition Package Required Documentation IV.A.4.b.ii(C) Resubmission of Claim IV.A.5.b Post Claim Reviews Standard IV.B.2.i.iii(D)(2)(a) Return of Entire Earnest Money Deposit IV.B.2.k.iii(A)(1)(c) Hard to Sell Properties Updated Advice of Payment and Title Approval guidance to reflect ML Updated to include inspection reports. Updated instructions for resubmitting a claim. Corrected language to align with existing requirements of Handbook Added bullet to address VA Amendatory Clause. Corrected hard to sell total commission from $1,000 to $2, Section V Quality Control, Oversight and Compliance V.A.1.c.i Exception for Multifamily Mortgagees Clarified Standard to list QC Program requirements not applicable to the QC Program of a Multifamily Mortgagee Appendix 4.0 HUD Schedule of Standard Attorney Fees (Applies to Servicing Only) Appendix 5.0 First Legal Actions to Initiate Foreclosure and Reasonable Diligence Timeframes (Applies to Servicing Only) Appendices Corrected inaccurate attorney fee for South Carolina and clarified language in second footnote. Corrected inaccurate data for California and DC Throughout Document Various technical edits including hyperlinks, punctuation, formatting, grammar or spelling, capitalization and placeholders. 16, 68, 73, 74, 83, 99, 100, 101, 109, 110, 118, 143, 160, 177, 225, 245, 246, 254, 299, 319, 323, 324, 345, 364, 399, 400, 401, 413, 431, 433, 435, , 442, 457, 482, 483, 494, 503, 504, 505, 513, 517, 530, 579, 614, 619, 625, 647, 670, 672, 701, 702, 710, 749, 814, 823, 826, 874, 883, 884, 902, 932, 950, 952, 963, /10

8 Technical correction for consistency (using canceled versus cancelled) Removed definition of Investor from Glossary and made investor lowercase in certain instances throughout the Handbook. Removed expired effective date language. 121, 122, 207, 220, 221, 225, 252, 253, 281, 294, 295, 300, 434, 612, 675, 836, 847, , 406, 462, 463, , 103, 111, 177, 179, 325, 937, 945, 946, 966, 967, 969, Implementation: Handbook changes identified in Section 2 of this Transmittal do not impact previously announced effective dates and are effective immediately, with the exception of highlighted text in the following sections: III.A.2.i.iii(A) Borrower s Financial Information III.A.2.i.viii Notice to Borrower after Loss Mitigation Review III.A.2.j.iii HUD s Loss Mitigation Option Priority Waterfall III.A.2.k.iv(D)(2) Special Forbearance Unemployment Agreement Standard III.A.2.k.v Loan Modification III.A.2.k.v(G) FHA HAMP Loan Modification Provisions III.A.2.k.v(H) FHA Mortgage Insurance Coverage and MIP III.A.2.k.vi(D)(2) FHA HAMP Standalone Partial Claim III.A.2.k.vi(F) FHA HAMP Trial Payment Plans III.A.2.p.iv Independent Third Party Providers III.A.2.r.i(D)(1)(c) Prohibition of Foreclosure due to Federal Law or Regulations III.A.2.r.i(G) Manufactured Housing Review Mortgagees must implement the policies set forth in these sections (as stated in Mortgagee Letter ) no later than December 1, Superseded Policy: Previous versions of Handbook are amended as described in this Transmittal. All previously superseded or canceled Mortgagee Letters, Housing Notices, and/or Handbooks remain canceled or superseded, except for items notated by an asterisk (*) below. All superseded or canceled policy documents will continue to be available for informational purposes only on HUD s website. Policy documents that have been superseded in full by the Handbook can always be found on HUD s Client Information Policy Systems (HUDClips) web pages, accessible from the Single Family Housing Superseded Policy Documents page at src=/program_offices/administration/hudclips/sfhsuperseded. Handbooks Superseded in Whole FHA Single Family Insurance Claims Property Disposition Handbook One to Four Family Properties Number , REV , REV 2 8/10

9 Mortgagee Letter(s) Superseded in Whole ML Number Updates to FHA s Loss Mitigation Retention Options and Miscellaneous Mortgage Servicing Policy (k) Rehabilitation Mortgage Insurance Program: 203(k) Consultant Draw Inspection Fee Property Assessed Clean Energy (PACE) Delivery of Advice of Payment and Title Approval Revised HUD A HUD/VA Addendum to Uniform Residential Loan Application Increasing Use of FHA s Claims Without Conveyance of Title (CWCOT) Procedures Single Family Foreclosure Policy and Procedural Changes for HUD Title II Forward Mortgages and HECM Reverse Mortgages; Reasonable Diligence Requirements; HUD s Schedule of Allowable Attorney Fees Good Neighbor Next Door Sales Program Updated Clarification Regarding Title Approval at Conveyance Additional Guidance for the Origination and Servicing of FHA insured Loans in Presidentially Declared Major Disaster Areas and Specific Requirement for Hurricane Sandy Affected Communities Responsibilities of Mortgagees in Regard to State and Local Laws Tier Ranking Scores Incentive Round FHA Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittances: Pay.gov Implementation Claim Process for FHA Refinances of Borrowers in Negative Equity Positions (ADP Codes 821, 822, 831, or 832) Mortgagee Eligibility Requirements and Clarification of FHA s Electronic Annual Certification Requirements and Procedures Mortgagee Letter(s) Superseded in Part ML Number The following Mortgagee Letters remain effective only for Home Equity Conversion Mortgages Voluntary Termination of FHA Mortgage Insurance* Adoption of the Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442/March 2005)* Adjustable Rate Mortgages Addition of LIBOR Index* Underwriting and Servicing Policies to Assist Victims of Presidentially Declared Major Disaster Areas* /10

10 5. Paperwork Reduction Act The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C ) and assigned OMB control numbers ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; and In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number. Edward L. Golding Principal Deputy Assistant Secretary for Housing 10/10