Mortgage Bankers Group Says FHA Fines For Delaying Foreclosure Starts Are Unfair

The mortgage banking industry is urging the Federal Housing Administration (FHA) to enact a “more equitable” penalty structure for servicers that fail to begin foreclosures according to agency deadlines.

Current rules require FHA lenders to initiate foreclosure within six months of a borrower default, down from the previously required deadline of 12 months. The change has resulted in significant cost savings for the agency, the Mortgage Bankers Association (MBA) wrote in an Oct. 20 letter to FHA Commissioner David Stevens, but has “also made it more difficult for servicers to comply with loss mitigation and foreclosure requirements at the same ...