Please see the following e-mail that I received from one of our clients regarding the enforcement by HUD of the recently published Predatory Lending guidelines.

If anyone has dealt with this issue and has any suggestions or ideas, your input would be greatly appreciated.

Robert,

I just want to let you know that I received a letter today from Atlanta Homeownership Center regarding our Loan # xxxxxxx This property was foreclosed in 1998 and we have conveyed property to HUD and have filed all appropriate claims and supplemental claims (including one to HUD for funds due xxxxx). This letter in part states the following: " We have determined that the subject mortgagor was a victim of predatory lending practices and therefore meets the criteria to receive relocation cost."

The letter further instructs us to immediately provide borrower the required payment of $2,000 and forward confirmation to the Atlanta Homeownership office. It further states we can then file a supplemental to recover the money.

However I question that since we are only allowed to file one claim to recover funds due xxxx.

My question to you: Were we aware that HUD is going back on properties for which foreclosure was completed before we ever became aware of these issues and is requiring us to pay the money and then file claims? Of course, if we can't file the claim we would go back to the original servicer who we acquired the loan from. But this seems to be to opening up a whole new Pandora's box that I personally was not aware of.

Do you have any information from any other servicer or your legal people that this is apparently happening? Thanks."

This property is in Chicago.

Thank you

The following e-mail update was received from the client on this issue.

Robert,

Good morning: An update to this. I have talked to Judy M. Burley at the Atlanta Homeownership Center. She advises me that these are people who won the class action lawsuits and can be either currently in foreclosure or have had foreclosures completed. In this case, with the foreclosure completed and the borrower having already moved to another location, she is being reimbursed for relocation expenses.

We will have one more coming from this same region with the same circumstances. I was also advised that we could and probably would be getting the same thing from other areas where predatory lending practices were an issue. We are able to recover our money by filing a supplemental claim.

She indicated a push is on to get these monies out to the individuals before the new administration takes over. The only problem I see now is that it will take us several months to recover these funds through the HUD Supplemental Claim Process.

Thanks, Robert.