Joint Trade Letter to FHA’s Proposal to Assist Borrowers in High-Interest Rate Environment
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The Mortgage Bankers Association (MBA), American Bankers Association (ABA), and the National Mortgage Servicing Association (NMSA) (the Associations) comment on the Federal Housing Administration’s (FHA) Draft Mortgagee Letter (Draft ML), Payment Supplement Partial Claim (PSPC). The Associations agree with the need for a loss mitigation solution that provides payment relief to seriously delinquent FHA borrowers in a high-rate environment, while protecting Ginnie Mae issuers from losses. However, as drafted, the complex and resource intensive PSPC would significantly increase the operational, compliance, liquidity, and reputational risk for mortgage servicers, while introducing potential harm to borrowers.
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