Removing Barriers Blog

FHA Partially Withdraws Proposal on Claims Deadline
Posted October 20, 2015 by CUNA Advocacy

On Friday, the Federal Housing administration (FHA) published a partial withdrawal of the proposed rule that established a maximum timeline to file a claim with FHA for insurance benefits on insured mortgages.  The provision would have unfairly penalized credit unions for delayed claims often for issues that were not in the control of the credit union. We strongly opposed the proposal, particularly since it was not well publicized, issued with a short comment period, and many in the industry were caught by surprise.  A copy of our comment letter can be viewed here. We are grateful to the FHA for listening to our concerns and we appreciate their decision to drop this draconian proposal. 

Please note that the withdrawal is only a partial, and FHA is still moving forward with those provisions related to the curtailment of interest and the disallowance of certain expenses incurred by a mortgagee as a result of the mortgagee’s failure to timely initiate a foreclosure action.  We will continue to work with FHA to ensure those remaining provisions of the proposed rule will be implemented in a fair and equitable manner for credit unions.