The FHA drafted and published a letter earlier this month outlining all changes and updates regarding reverse mortgages and Title II mortgages. The new policies will take effect on New Year’s Day of 2016, replacing all previous Attorney Fee schedules, Reasonable Diligence Timeframes (RDT), and Cash for Keys Allowances.
The document lays out all updated Reasonable Diligence Timeframes, which now begin when the First Legal Action in a foreclosure occurs. In regards to the RDT, the document allows extensions of the deadline when all parties involved in bankruptcy take the appropriate steps promptly. Extensions are permitted in cases where a separate legal action is necessary to initiate the possession process in a foreclosure case.
Cash for Keys allows landlords, banks, and any other mortgage entities to give cash incentives to tenants who willingly vacate a foreclosed property. The new maximum allowance for Cash For Keys outlined in the FHA letter is $3,000 per dwelling, and the allowance is awarded when the occupant vacates the property within 30 days.
The FHA has also provided a table with the maximum amount of reimbursable fees from legal procedures that accompany the foreclosure process. These fees include a foreclosure attorney fee, a bankruptcy clearing fee, a possessory action fee, and a completion of deed-in-lieu fee. The total amount is different in every state and is laid out on a table in the FHA letter. Moreover, the fees must pertain exactly to the outlined duties and cannot be allocated to any other category or facet of legal fees incurred.
For exact tables and timelines outlining the changes feel free to click HERE and read the entire FHA letter for yourself. While at first the changes may seem a bit daunting to understand, the wording is very clear, and it only takes about 10 minutes to read
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