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?In case you are one of many homeowners with an FHA loan and desire to get your loan modified, there are a few things you should know about FHA Loan Modifications and FHA Short Sales. The FHA loan program is administered by the Federal Department of Housing and Urban Development and because the program will absorb any losses on a short sales or loan modification, the FHA is the entity that makes the decisions on how loan mods and short sales are actually implemented. The FHA employees do not actually review any loan modification requests or short sale offers in-house, instead, the FHA mandates specific written instructions to the lenders that process the loans.
The specific instructions provided by the FHA are called Mortgagee Letters and if a lender wants to be covered or reimbursed for a loss by the FHA’s Insurance, they need to be thoroughly familiar with the Mortgagee Letters process and must follow the instructions to the letter. Any lender working with the FHA must know and follow the loan process guidelines contained within the Mortgagee Letters. The good news is that individual homeowners and borrowers can now easily access the Mortgagee Letters online too. This means you can learn the ins and outs of FHA loan modifications and short sales procedures on your own and it will give you a leg up when negotiating your own FHA deals with a lender.
The FHA also issues periodic updates to the Mortgagee Letters, but the entire set of letters will consist of about 50 pages of material that you will need to read in order to find out the specific rules covering an FHA Loan Modification or short sale in your area. The specific Mortgagee Letters you will need to study are contained within Mortgagee Letter 2009-35, Mortgagee Letter 2000-05, Mortgagee Letter 2002-17, Mortgagee Letter 2008-21, Mortgagee Letter 2010-11, and Mortgagee Letter 2009-23. All are easily accessed online through the Federal Housing Administration’s list of Mortgagee Letters located at the Department of Housing and Urban Development website.
