On Jul. 17, HUD proposed rule on revised single family sale program.
HUD proposed rule to combine two HUD loan programs into one permanent program.
Combine Single Family Loan Sale Program for forward loans (SFLS) and Vacant Loan Sales Program for HECMs (HVLS) into permanent Single Family Sale Program.
Revised Single Family Mortgage Insurance, Home Equity Conversion Mortgages, and Disposition of HUD-Acquired and - Owned Single Family Property regulations.
Provide for sale of HUD-held single family forward mortgages, home equity conversion mortgages (HECMs), via competitive sale of and direct sale of single family loans.
Remove regulations on Disposition of HUD-acquired and -owned single family property.
Proposed Amendments
Give FHA flexibility to maximize returns to Mutual Mortgage Insurance Fund (MMIF) in cases when a loan sale would help minimize losses from the disposition of each asset.
Rule also sought to provide flexibility for the management of defaulted loans and more efficiently accept assignment and dispose of assigned mortgages through loan sales.
Specified certain claim requirements on loss mitigation loan eligibility for single family sale; HUD withdraw, require repurchase of single family loan not satisfy requirements.
Required participating servicers comply with any loan sale notification requirement to borrowers (loan sale notification) by notice, such as a sale notice or mortgagee letter.
Post-sale requirements, like first-look sale requirement for purchaser-held real estate owned property from foreclosure or deed-in-lieu of foreclosure of single family loan.
Codified demonstration structure and process, which includes improvements identified and tested over the course of the demonstration, as a permanent program.
Removed subpart D of 24 CFR 291 as no longer governs active sales of HUD-held single family loans; added Subpart G, Sale of HUD-held single family mortgage loans.
Revised FHA single family mortgage assignment claim requirements; added to 24 CFR 203, 24 CFR 206 on payments made when loan assigned as part of new loan sale.
Consultation
Comments on proposed rule re single family sale program are due by Sep. 16, 2024.
Dec. 2024 HUD Final Rule
On Dec. 11, 2024, HUD published final single family loan sale rule in federal register.
Amends the requirements for the sale of eligible single family mortgage loans insured by the FHA and assigned to the Secretary of HUD in exchange for claim payments.
The mortgage notes are sold, without FHA insurance, to qualified purchasers in a manner that seeks to maximize recoveries and strengthen HUD's MMIF.
Transitions pilot single family sale program from demonstration to permanent program.
Removes existing regulations which provided for retired program for these loan sales.
The final single family loan sale program rules will be effective as of Jan. 10, 2025.
