U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D.C. 20410-8000

October 29, 2001

OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER

MORTGAGEE LETTER 2001-28

TO: ALL APPROVED MORTGAGEES

ATTENTION: Single Family Servicing Managers

SUBJECT: Single Family Foreclosure Policy and Procedural Changes:
Extension of Time to Initiate Foreclosure in the District of Columbia

On August 31, 2001, new legislation was enacted in the District of Columbia which affects all foreclosure actions where the first legal action to initiate foreclosure occurs on or after October 1, 2001. This legislation is known as the "Protections from Predatory Lending and Mortgage Foreclosure Act of 2001".

Although the legislation implements several changes in the present foreclosure process, this mortgagee letter addresses only the effect of the legislation in meeting HUD's initiation of foreclosure requirements. A breach letter must now be sent for all cases where the first legal action to initiate foreclosure will occur on or after October 1, 2001. The breach letter must provide, among other requirements, a thirty day right to cure.
The Department recommends that lenders refer to their legal counsel for assistance in ensuring that all the new requirements of this legislation are met.

To assist lenders in the transition, HUD is providing a sixty day extension of time to initiate foreclosure for mortgages where the lender should have initiated foreclosure no later than October 1, 2001, to be in compliance with 24 CFR 203.355. A thirty day
extension of time to initiate foreclosure will be provided for mortgages where the lender should have initiated foreclosure no later than November 1, 2001, to be in compliance with 24 CFR 203.355. Any requests for more time than provided by this blanket
extension or any request for extensions after November 1, 2001, must be submitted to HUD's National Servicing Center's office in Tulsa, Oklahoma.

As with all approved extensions of time, lenders must identify the ending date of the extension in item 19 of form HUD-27011, Part A. If the extension is not properly identified on the claim form, the claim system will not know that an extension was
approved and the lender may have interest curtailed as a result of the date exclusion.

In light of the events of September 11, 2001, the Department cautions lenders to review the status of any borrower who is scheduled to be foreclosed to ensure that the borrower was not impacted by the events of September 11, 2001 nor a member of the National Guard or military reserves called to active duty. For additional guidance on those issues, Mortgagee Letter 2001-21, addresses the September 11, 2001, disaster moratorium and
Mortgagee Letter 2001-22, addresses the requirements of the Soldiers' and Sailors' Civil Relief Act.

If you have additional questions, please contact the Department's National Servicing Center at (888) 297-8685.

John C. Weicher
Assistant Secretary for Housing-
Federal Housing Commissioner