USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶18.5 — Loss Mitigation Options
USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶18.5 — Loss Mitigation Options.
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Verbatim provisions from USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶18.5 — Loss Mitigation Options — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
USDA HB-1-3555, Chapter 18, § 18.5 — Loss Mitigation Options
The servicer will make every possible effort to assist borrowers who are experiencing an involuntary inability to pay their mortgage and show cooperation to resolve default situations using appropriate loss mitigation tools. Loss mitigation options include informal repayment agreements, special forbearance agreements, or loan modifications. Special forbearance agreements and loan modifications should be used when information in the servicing file supports the borrower’s ability and willingness to pay. Mortgage Recovery Advance (MRA) can be used to satisfy a borrower’s delinquency and bring the borrower current. A voluntary liquidation method such as a pre-foreclosure sale or a deed-in-lieu of foreclosure may be used to protect the Government’s interest once the servicer has examined other servicing options and determined the borrower cannot continue with the loan obligation. Traditional loss mitigation options must be exhausted prior to use of Streamline Options. Consideration must be given to all options prior to initiation of liquidation. The servicer must attempt to obtain information on the borrower’s financial condition and make an informed determination of the borrower’s ability to repay the arrearage and continue making mortgage payments as scheduled. Details on consideration and processing the below actions are located in the Attachment 18-A, The Loss Mitigation Guide: Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. x Servicing Early Delinquent Loans x Informal Repayment Agreement x Loss mitigation overview x General policies, procedures and minimum actions that constitute effective loss mitigation techniques x Special Forbearance x Loan Modification x Mortgage Recovery Advance (unrecorded) x Pre-Foreclosure Sale x Deed-in-Lieu of Foreclosure x Servicing plan, checklists; disposition cost benefit analysis x Reporting – ESR and status of mortgage codes. All servicers must submit loss mitigation information through USDA LINC https://usdalinc.sc.egov.usda.gov/RHShome.do.
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Source of record: https://claudeforcompliance.com/regs/usda-hb-3555-18-5/
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