HUD has released Federal Register O4 Directive Number HUD-2004-0007, which explains a proposed rule that would revise certain regulations governing actions by mortgagees with respect to mortgages in default.  The proposed revisions also address other regulations, amending them to make them consistent with industry practices.

This proposed rule includes consideration of changes to §203.604(2), which concerns the requirement for face-to-face meetings with mortgagors whose properties are located within a 200-mile radius of a branch office.

Based on numerous conversations with servicers about the 200-mile radius issue, Safeguard has suggested that affected servicers be allowed to comply with the intent of this rule by sending a certified letter to the borrower.  The letter would advise the borrower that he/she may request a face-to-face meeting with a servicing representative to discuss loss mitigation options.

HUD has invited comments from interested persons to the amendatory language in the proposed rule.  If you agree with the suggestion to accept a certified letter as compliance with this rule, we urge you to submit your comments to HUD.  Comments must be submitted by January 10, 2005.

To review the entire document, please click on Revisions to the Single Family Mortgage Insurance Program.

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