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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 34 November 2023 C O V E R S T O R Y In 2018, Fannie Mae launched its Pre-Foreclosure Preservation Program, which offers servicers the opportunity to allow Fannie Mae to handle the man- agement of inspection and preservation activities on delinquent loans secured by vacant properties. Thibaudeau explained, "Our program utilizes a national network of vendors that help standardize the preservation of these properties in our portfolio. This initiative reduces complexity for servicers, creates savings for borrowers and servicers, and standardizes end-to-end property manage- ment. It also allows us and our vendors to benefit from lower costs through econo- mies of scale." While HUD was not ready to an- nounce a timeline for the allowable fee updates they are reviewing as of press time, Edelman noted several recent policy changes FHA/HUD have rolled out: "We recently put out a new policy on ADUs to allow borrowers to be able to count prospective rental income. We're going to be hopefully rolling out some proposed changes to our rehab loan here soon. We've also been working very hard on loss mitigation/HECM, and you'll begin to see a lot hitting on those things. It's a constant balance of priorities, and we are looking at the allowable fees. In the meantime, we're trying to make sure that we have a functioning workaround so that folks are getting reimbursed for reasonable fees, continuing to make sure that works while we get to updating the fees." Editor's note: MortgagePoint reached out to Freddie Mac for comment on this piece, but they did not reply as of press time. What's Next? M aher said that the recent adjustments to Fannie and Freddie's pricing struc- tures have helped jumpstart this conversa- tion across the industry and are helping to stabilize and rebuild vendor networks. "It was a great start towards a sustain- able industry for preservation field service companies, and we're hoping to see FHA join in," Maher said. "It takes all of us working together to preserve and protect default properties, and we appreciate the opportunity to discuss current challenges and work together on solutions." Ray is hopeful that the needed chang- es may be on the horizon but also quick to lay out the stakes involved. "We are cautiously optimistic there will be a paradigm shift soon, before it is too late," she said. "Our industry plays a crucial role in stabilizing communities. Without us, the banks and servicers can- not preserve and protect their portfolios, like the investors require. If this were to occur, the consequences would be dire and would detrimentally affect all stakehold- ers, with the most significant impact to the communities, causing neighborhood blight." STOP THE PRESSES: FHA ANNOUNCES ALLOWABLE FEE UPDATES Editor's Note: As this issue was going to press, FHA announced increases to some of the fees at the heart of this article. Below is the announcement shared with Mortgage- Point in advance of its official unveiling at the 2023 National Property Preservation Conference in Washington, D.C.. Federal Housing Administration Increases Allowable Fees for Inspections of Vacant Single-Family Homes On Tuesday, November 14, the Federal Housing Admin- istration announced in Mortgagee Letter 2023-20 that it has increased the allowable property inspection fee limits for property inspections of single-family homes associated with defaulted FHA-insured mortgages. These inspections are an important component of mortgage servicers' preservation and the protection of properties, and are vital to safeguarding neighborhoods from blight arising from inadequately maintained unoc- cupied homes. With these latest updates in Mortgagee Letter 2023-20, FHA has increased fees for certain allowable inspection categories, making its fee limitations consistent with those in use by other industry participants. FHA in- tends to evaluate allowable parameters for other property preservation expenses in the future. "This is the first step in updating our policies governing property and preservation fees," said HUD Deputy Assistant Secretary for Single Family Housing Sarah J. Edelman. "Main- taining and preserving vacant properties is important to us, and we know it is important to the residents and communities where these properties are located." The new allowable inspection fees became effective immediately as of the release of Mortgagee Letter 2023-20.