August 27, 2014

HUD publishes final rules on FHA mortgages

Aug. 26, 2014 – The Department of Housing and Urban Development today published two final rules revising the Federal Housing Administration's regulations on mortgages.

The first is a final rule that revises FHA's regulations for its single family adjustable rate mortgage (ARM) program in order to align the agency's interest rate adjustment and notification regulations with the Truth in Lending Act requirements for notifying mortgagors of ARM adjustments (as recently revised by CFPB). The rule requires an interest rate adjustment which will result in a change in the mortgagor's monthly ARM payment.

That rule also requires mortgagees of FHA-insured ARMs to comply with the disclosure and notification requirements of the 2013 TILA Servicing Rule, including advance notice of between 60 and 120 days of an adjustment to a mortgagor's monthly payment.

The second rule revises FHA's regulations allowing FHA-approved mortgagees to charge mortgagors interest through the end of the month in which the mortgage is being paid. The final rule now allows mortgagees to charge interest only through the date the mortgage is paid, and not beyond.