HUD Announces Quality Control Waiver on FHA Mortgages Impacted by Los Angeles County Wildfires

Anticipating an increase in Early Payment Defaults (EPDs), for properties located in the Presidentially Declared Major Disaster Area (PDMA) impacted by the January 2025 wildfires within Los Angeles County, HUD announced a limited waiver of the Mortgagee’s loan level quality control program requirements. 

The limited waiver permits a Mortgagee to exclude from its loan-level quality control program (and therefore its responsibility for determining whether the related loan complies with FHA origination and underwriting requirements) EPDs (i) within the PDMDA, (ii) with a mortgage closing date before January 7, 2025, and (iii) that become an EPD between February 1, 2025, and July 31, 2025.