MBA Opposes FHA's Condo Escrow Account Proposal
The Mortgage Bankers Assoc-iation is urging the FHA to drop a proposal that would require servicers to set up escrow accounts for condominium and homeowner association dues.
The trade group also wants the Federal Housing Administration to eliminate a requirement that servicers meet with certain delinquent borrowers.
While the FHA is concerned about liens on unpaid condo and HOA dues, the escrow proposal "recommends a nearly impossible monitoring and compliance obligation on mortgage companies that is unprecedented in scope and difficulty," MBA says in a comment letter.
MBA points out there are over 250,000 condominiums, cooperatives and HOAs and the "anticipated volume and costs for processing condominium and HOA escrows are staggering," the comment letter says.
The FHA recently clarified its requirements for face-to-face meetings with delinquent borrowers who live within 200 miles of the servicer's office.
MBA contends the meeting requirement is outdated and no longer necessary because of the loss mitigation program. It also raises safety issues for employees who have to visit the borrowers.
Due to the availability of counseling services and increased contact with borrowers under the loss mitigation program, "MBA respectfully asks that FHA eliminate this requirement in its entirety."
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