FHA Issues Temporary Waiver of QC Requirements for EPDs

June 25, 2020 BY MQMR Blogger


Has FHA issued any guidance with regard to quality control (QC) requirements for early payment defaults (EPDs) in light of the COVID-19 pandemic and increased EPDs nationwide?



Yes, FHA recently issued a temporary waiver of its loan-level QC requirements for EPDs.  The waiver suspends a mortgage lender’s requirement to select and perform QC reviews of all EPDs for May, June, and July 2020 QC selections.


FHA explained that it observed a significant increase in EPDs nationwide and believes that they are likely caused by loss of employment and/or income due to the public health emergency, rather than a result of non-compliance with FHA Single Family origination and underwriting requirements. Additionally, FHA noted that the federal CARES Act authorizes forbearance relief regardless of delinquency status, which may also cause EPDs.