HUD’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)).
- 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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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.
- 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?
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