To this point, FHA hadn’t published its method of identifying servicing defects before, except in draft form.

The agency had never published its method of identifying servicing defects before.

The proposal is meant to address liquidity challenges servicers face from tax and insurance advances in an elevated interest rate environment.

FHA is considering reimbursing servicers for tax and insurance advances earlier in the default process.

The draft standards differ based on whether borrowers can resume their original mortgage payments or need payment relief. Comments on the proposal are due Dec. 23.

The new requirements go into effect Jan. 1. However, FHA has provided servicers alternative interim procedures through June 30.

Among the proposed revisions, FHA would reduce the requirement for rental income history from boarders from two years to 12 months.

The Mortgage Bankers Association warned that the proposed changes would expose servicers to new operational and regulatory risks.

FHA released a draft mortgagee letter this week proposing new nonjudicial foreclosure processes for mortgage liens held by the secretary of the Department of Housing and Urban Development.

Following pushback from mortgage industry groups, FHA proposed extending the timeline for lenders to report certain cyber incidents to HUD.