MBA Statement on FHA’s New Loss Mitigation Option

WASHINGTON, D.C. (February 21, 2024) — MBA's President and CEO Bob Broeksmit, CMB, released the following statement on the Federal Housing Administration’s (FHA) Payment Supplement, a new loss mitigation alternative to a traditional loan modification:

“MBA supports this additional tool that will allow servicers to better help struggling borrowers avoid foreclosure in today’s high-interest rate environment and commends FHA for its transparency and engagement with industry stakeholders throughout the proposal process.  

“Prioritizing payment relief and reducing operational complexities were imperative, and we believe the improvements made following multiple rounds of feedback will ensure mortgage servicers have a new effective and efficient way to help struggling borrowers stay in their homes. As recommended, a longer implementation period of January 2025, and extending the sunset date of the COVID-19 Recovery Options beyond that date, will further support servicers’ implementation efforts. 

“MBA will work with FHA on the implementation of the Payment Supplement as well as its other loss mitigation programs, with a shared goal of assisting distressed borrowers while protecting the Mutual Mortgage Insurance Fund and ensuring secondary market certainty.”