HUD Face-to-Face: Managing Deliverables in 2023
Impact of Natural Disasters on the US Mortgage Industry
November 30, 2022
HUD Announces 30-basis-point reduction in Annual Mortgage Insurance Premiums
March 31, 2023HUD’s face-to-face program provides the borrower with the opportunity to meet with a representative from the bank or mortgage company to discuss the delinquency of the loan, and attempt to set the borrower up on some type of repayment plan or loss mitigation option. This program will continue to be on a partial waiver until December 31, 2023.
HUD initially established this requirement stating, “The mortgagee must attempt a face-to-face interview with the borrower no later than the 61st day of delinquency, unless exempt under 24 CFR § 203.604.” On March 13, 2020, a National Emergency concerning Coronavirus Disease 2019 (Covid-19) was declared, which is also the date that HUD initially published a temporary partial waiver for the face-to-face requirement, and then through subsequent extensions, the partial waiver continued through December 31, 2022. On December 19, 2022, HUD extended the face-to-face partial waiver until December 31, 2023, due to several reasons including, but not limited to, continued public health concerns around the spread of Covid-19.
The partial waiver only applies to FHA-insured forward mortgages. The partial waiver does not apply to the Section 248 Insurance Program - the face-to-face requirements are still in place for this section (24 CFR § 203.604(e)(1)).
HUD has requirements that still need to be met in lieu of the face-to-face requirement; the mortgagee must still reach out to the borrower, contact the borrower, and attempt to meet the requirements of § 203.604. Per HUD, the mortgagee must complete the following:
- The mortgagee must establish contact with the borrower, using alternative methods (phone calls, e-mail, video calling) to meet the requirements of § 203.604, to determine the borrower’s circumstances, and to determine an appropriate repayment plan, as well as to inform the borrower of the following:
- Local credit bureaus and prospective creditors will have access to the borrower’s loan information
- Provide the borrower with other options and available assistance, if any
- The names and addresses of HUD officials to whom further communications may be addressed
- The mortgagee must document their contact with the borrower, following the same protocol that is currently required, noting the alternative methods of contact used in lieu of face-to-face contact.
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If the mortgagee follows the aforementioned steps, the mortgagee will be meeting HUD’s expectations on their partial waiver for the face-to-face interview. The Servicing industry has another year to continue to enhance their communication and alternative methods to reach the borrowers, to discuss loss mitigation options without completing the face-to-face requirement.
HUD is stating many reasons for extending the partial waiver. Therefore, considering the existing Covid-19 National Emergency; the continuing PHE Declaration; general ongoing public health concerns for many resulting from the combination of Covid-19 pandemic, RSV, and seasonal flu; servicer constraints; costs; and safety concerns, HUD determines it is prudent to continue being cautious, and to take steps that safeguard the health and safety of the public, federal workers, contractors, and vendors.
This calls for several questions to be answered.
- How best will the industry handle all the demands that everyone will experience?
- How best do we handle all the deliverables?
- How best do we manage the staff to handle extra workload and to meet timelines that all companies will have to be held accountable?
- How best will all companies manage their outside vendors, and make sure they are held accountable for their deliverables?
IMS Datawise has been serving the mortgage industry in a variety of ways, and has been instrumental in assisting all types of companies in meeting their goals and objectives, while delivering quality and economies of scale.
Connect with IMS Datawise at info@imsdatawise.com to get a complete mortgage support service package.