On behalf of our low-income clients, we applaud the servicing policy updates that HUD provided in Mortgagee Letter 2023-03. By expanding access to the waterfall established in response to the COVID-19 pandemic, FHA is minimizing barriers to all borrowers seeking help after a financial crisis. Increasing the partial claim cap to 30% will more effectively help borrowers achieve payment relief.
We also appreciate that HUD has made it easier for borrowers to work with the Homeowners Assistance Fund and has extended the availability of COVID relief beyond the end of the national emergency.
HUD should provide further clarification on issues that the Mortgagee Letter did not address.