RD Instruction 1980-D, section 1980.371(d) states that lenders must make a decision regarding liquidation by the time the loan is three payments past due. RD Instruction 1980-D, section 1980.374 states that the foreclosure must be initiated within 90 days of the date the decision to liquidate is made unless the foreclosure has been delayed by law or an alternative to foreclosure is recommended to resolve the delinquency. Initiation of foreclosure begins with the first public action required by law, such as filing a Complaint or Petition, recording a Notice of Default, or publication of a Notice of Sale. RD Instruction 1980-D provides no guidance as to what is considered a reasonable time frame in which to complete a foreclosure in the state where the property is located. This AN establishes State specific guidance for time frames for completing foreclosure actions initiated after the date of this notice.

The SFHGLP adheres to Freddie Mac’s foreclosure time frames. These time frames are measured from the first legal action (which is in accordance with RD Instruction 1980-D) to the foreclosure sale date, which is when the six-month Real Estate Owned (REO) marketing period begins. Basic time frames of foreclosure processes most commonly utilized by private attorneys in state courts compare favorably to the Freddie Mac time frames. Additionally, Freddie Mac measures time frames in days as opposed to months, making compliance determinations and interest reduction calculations easier.

To view the Administrative Notice in its entirety, including the implementation responsibilities and the State specific guidance, please click here.