The Federal Housing Administration (FHA) is bracing for a large spike in insurance claim payments now that servicers have adjusted to the requirements of the $25 billion robo-signing settlement with the nation’s attorneys general.

“We are beginning to see a breaking of the foreclosure backlog that has been affecting the entire mortgage industry since the start of fiscal year 2011,” the agency says in a new report on the condition of the FHA mortgage insurance fund.

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