“The complex and resource-intensive PSPC would significantly increase the operational, compliance, liquidity, and reputational risk for mortgage servicers while introducing potential harm to borrowers,” read part of the seven-page letter sent to FHA commissioner Julia Gordon.
Therefore, the associations proposed the following adjustments to the proposed policy:
1. Simplify and clarify the PSPC by creating a three-year level payment term, prioritizing permanent relief over temporary relief, reinforcing FHA’s traditional use of a prescribed waterfall, and addressing substantial documentation issues with the PSPC proposal;
2. Increase the allowable incentive to $3,500 to protect servicers’ liquidity positions in today’s market and the value of Ginnie Mae MSRs actively being transferred among program participants; and
3. Establish the mandatory compliance date for servicers 12 months after the publication date of the Draft ML.
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