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U.S. Department of Agriculture: Centralized Servicing for FmHA Single-Family Housing Loans

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Report Type Reports and Testimonies
Report Date Sept. 23, 1993
Report No. RCED-93-231BR
Subject
Summary:

The Farmers Home Administration (FmHA) makes housing and farm loans to rural Americans who cannot otherwise obtain the loans on reasonable terms. Centralized servicing of loans is widely and successfully used by the private sector, including mortgage firms that typically consolidate and centralize loan-servicing functions, such as loan collections, escrow accounting for taxes and insurance, and delinquency management. This briefing report notes that FmHA's single-family housing loan portfolio is far larger than the agency's farm loan portfolio, FmHA's efforts during the past five years to centralize servicing operations for direct housing loans have not been fruitful, the advantages of centralization outweigh the disadvantages, and options for moving forward with centralization would be consistent with the Agriculture Department's efforts to reinvent itself.

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