What is the Servicing Defect Taxonomy?
The Servicing Defect Taxonomy is a comprehensive list of defects that can occur during the servicing of a mortgage loan. It is used by the Federal Housing Administration (FHA) to identify and track defects, and to take corrective action. The taxonomy was originally published in 2013, and has been revised several times since then. The most recent revision was published in December 2023
What are the changes in the revised taxonomy?
The revised taxonomy includes a number of changes, including:
The addition of new defects, such as defects related to the COVID-19 pandemic
The consolidation of some defects into broader categories
The clarification of the definitions of some defects
The addition of guidance on how to identify and correct defects
Why was the taxonomy revised?
The taxonomy was revised to address a number of issues, including:
The need to reflect the changing landscape of the mortgage servicing industry
The need to improve the accuracy and consistency of defect identification and tracking
The need to provide clearer guidance on how to identify and correct defects
How will the revised taxonomy be used?
The revised taxonomy will be used by FHA to:
Identify and track defects in the servicing of FHA-insured loans
Take corrective action to address defects
Provide guidance to servicers on how to avoid defects
What are the benefits of the revised taxonomy?
The revised taxonomy provides a number of benefits, including:
Improved accuracy and consistency of defect identification and tracking
Clearer guidance on how to identify and correct defects
Enhanced ability to identify and address systemic issues in the servicing of FHA-insured loans
Kind regards J. Ross.
Loans News & Trends
Commercial
