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FHA Readies New Delinquency Reporting Requirements

Las Vegas-The Federal Housing Administration is ready to unveil its new default reporting requirements.

Speaking at the Western States Loan Servicing Conference here, Leslie Bromer, servicing team leader at the Department of Housing and Urban Development, said that the new FHA default reporting requirements will take effect in November. She said the goal is to simplify the reporting process.

"We've come up with what we think is a pretty good plan," she said.

The details of the plan are described in HUD's mortgagee letter 2006-15. That letter was sent to approved FHA lenders in June.

HUD believes the changes being made to the FHA's Single Family Default Monitoring System will allow the agency to collect more data and better track the events that occur between the beginning of a default and the resolution of loans through reinstatement, claim, prepayment or loss mitigation. The FHA system covers new delinquencies, open delinquencies and loan resolutions. HUD is adding several new status codes to the electronic delinquency reporting system.

Delinquency reporting data will remain due on the fifth business day after the close of a month. The changes include new codes for state and reason of default. The new rules require lenders to report for 30-day and 60-day delinquencies. Previously, the FHA only required delinquency reporting on loans that were 90 or more days overdue.

Lenders will start using the new reporting requirements for the October reporting period, due to the FHA on Nov. 7. For the moment, mortgage servicers with questions about the new reporting requirements should direct those inquiries to the FHA's national mortgage servicing center in Oklahoma, she said.

The FHA has seen some drop in the number of loss mitigation plans implemented by FHA lenders, but the numbers are coming back up this year. The FHA recorded 86,869 loss mitigation plans in fiscal 2004, 58,107 in 2005 and anticipates 74,372 this fiscal year, which ends in October.

Ms. Bromer said HUD also plans to issue a new letter on property preservation and protection by the end of this year that will include some increases in the reimbursement levels for field service work.

She said HUD is hopeful that Congress will approve FHA reforms to make the government guaranteed lending program more attractive to consumers. Congress is considering legislation that will give the FHA more ability to adapt to changes in the marketplace, she said.

"What we are hoping for is more flexibility in the way we do business," she said.

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