U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY

WASHINGTON, DC 20410
October 24, 2001

MORTGAGEE LETTER 2001-24

TO: ALL APPROVED MORTGAGEES

ATTENTION: Single Family Servicing Managers

SUBJECT: Consideration For Mail Delays Following the Terrorist Attacks

In response to the events of September 11, 2001, the Department issued Mortgagee Letter 2001-21 , Relief Options for Borrowers Affected by the Events of September 11, 2001. Included in that mortgagee letter were specific servicing requirements to be followed for those FHA borrowers who were identified as being affected by the terrorist attacks.

The initial response from the public has been favorable in that lenders appear to have positively responded to borrowers who have identified themselves as being directly affected. However, the Department has also learned that hundreds of thousands of
borrowers may be indirectly affected because of the problems encountered by the United States Postal Service. For example, the United States Postal Service's Church Street Station (in close proximity to the World Trade Center) suffered extensive damage, estimated in excess of $25 million, to both the structure and mail vehicles. Those problems have resulted in lost or delayed mail.

In addition to the damaged Church Street Station and the resulting lost or delayed mail from that facility, every U.S. resident may have been impacted on some level by mail delays.

Immediately following September 11, 2001, the Federal Aviation Administration (FAA) grounded air travel. Mail which had previously been shipped via air had to be forwarded via ground transportation. Although the FAA is again allowing mail to be transported via air cargo, mail delays occurred throughout the nation in September 2001 and will probably continue at least for the short term.

Lenders are encouraged to give the benefit of the doubt to borrowers whose September or October 2001, installments arrive late, especially if the borrower has an established pattern of remitting payments timely. This includes waiving or reversing late charges already assessed as well as withholding the reporting of late payments to the credit bureaus. In many situations, lenders have automated systems which allow no input
or intervention prior to the assessment of a late charge or before a file notifying a credit bureau is forwarded. Therefore, lenders are encouraged to change their automated systems, if possible, to suppress the late charge assessment and the credit bureau referral to prevent such actions being taken against borrowers whose payments were received late as a result of circumstances clearly beyond their control.

Please direct any questions on this letter or other servicing issues to the Department's National Servicing Center in Oklahoma City, at (888) 297-8685 (this is a toll-free number).

Mel Martinez