| HUD Resecuring Within Maximum Allowable Securing Fee |
| Monday, 22 November 2004 | |
|
The question
of whether
re-securing requires
pre-approval if it can
completed within the Maximum Allowable Securing Fee has
been debated since the
securing allowable was first established. HUD has recently
provided additional clarification regarding their policy on this
issue.
In ML 2002-10, Attachment 3, Page 1, HUD states that ?Mortgagees may secure property without prior approval if the cost of securing does not exceed the cost allowable for the 'one-time securing fee.' This should accelerate the securing of properties and reduce opportunities of vandalism. If the cost of securing property exceeds the cost allowable, written approval from the M&M contractor is required for the costs in excess of the limit.? This was amended in ML 2003-05 Attachment 3, Page 1, as follows: ?[T]he term 'One-Time Securing Fee' was used to identify an overall cap for the various costs required to secure a property. Unfortunately this term was misunderstood and as a result needs clarification. Therefore, the term 'One-Time Securing Fee' is henceforth to be known as the 'Maximum Allowable Securing Fee.' " HUD has affirmed that, if the initial secure does not expend the entire Maximum Allowable Securing Fee, additional expenditures to resecure the property may be made without pre-approval by HUD. Any resecuring costs that would exceed the Maximum Allowable Securing Fee, however, must be submitted to HUD for approval. Documentation demonstrating the necessity of any
re-securing must be submitted when claiming this
expense.
In response to this clarification, Safeguard intends to inform contractors of the costs incurred to date for securing. Contractors will be advised that they should proceed to re-secure a property that requires resecuring as long as this work can be completed without exceeding the allowable. Contractors will also be advised that they must provide complete photo documentation of any required resecuring. If you do not want this policy implemented for your properties, please notify Kathy Cogan at kathy.cogan@safeguardproperties.com. Thank you. Kathy Cogan |
