The FHA's proposed Mortgagee Letter aims to clarify the understanding of partial claims among mortgage borrowers and originators, ensuring awareness of owed amounts.
By proposing new guidelines for partial claims, FHA hopes to mitigate foreclosure risks and minimize losses for the FHA Mutual Mortgage Insurance Fund.
The draft ML will help streamline the process for lenders, allowing them more time to record partial claim security instruments, shifting from 5 to 15 days.
HUD’s intention is to make it easier for all parties involved to understand and manage partial claim obligations when a home is sold or refinanced.
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