Press Release News

Washington- The Federal Housing Administration (FHA) comes in support of struggling homeowners to meet their mortgage obligations by posting for feedback a proposal for a new home retention option. With the help of a new option known as the payment supplement partial claim, the mortgage servicers can use the PHA partial claim to bring back the borrower’s mortgage current and provide temporary reductions in their monthly mortgage payments for 5 years.

The effectiveness of some of the FHAs existing loss mitigation options in assisting borrowers has been reduced due to the increase in interest rates in the past year. The FHAs widely used loan modification option is no longer as effective as it was in previous times as it reduced borrowers’ monthly payments to the levels that they can easily afford. Unfortunately, at present, borrowers are compelled to modify at market rates which are usually higher than the current rates.

Fortunately, the Payment Supplemental Partial claim allows homeowners going through a difficult time to reduce their monthly payments and keep their existing interest rate using funds from FHA partial claims. The homeowners can pay the FHA in the future when they plan to sell their home or refinance.

Julia Gordon said, “Many homeowners continue to experience hardships due to health or financial difficulties that occurred during the pandemic, and these challenges have been exacerbated for these and other borrowers by current economic uncertainties”. The moment Julia Gordon saw that the existing loan modifications were turning out to be inadequate, she along with her team came up with other alternatives to provide relief to the people.

Consequently, FHA is asking people to provide feedback on this proposal by June 30, 2023.