FHA proposes innovative mortgage payment reductions to aid struggling homeowners.
The Federal Housing Administration (FHA) has proposed a new home retention option, the Payment Supplement Partial Claim, to help struggling homeowners meet their mortgage obligations. The option would allow mortgage servicers to use the FHA Partial Claim to bring a borrower’s mortgage current and provide temporary reductions to their monthly mortgage payments for up to five years. The proposal comes as the effectiveness of some of FHA’s existing loss mitigation options has been limited by rapid and steep interest rate increases. Homeowners experiencing a hardship who are unable to obtain a significant payment reduction with other loss mitigation options can keep their existing interest rate and reduce their monthly payment temporarily using funds from the FHA Partial Claim.