The U.S. Department of Housing and Urban Development (HUD) has extended from January 1, 2025 until July 1, 2025, the compliance date for certain provisions of the department’s rule entitled “Modernization of Engagement with Mortgagors in Default.’’
That rule requires mortgagees to conduct meetings with all mortgagors in default.
As revised by the Modernization of Engagement with Mortgagors in Default final rule, 24 CFR 203.604(a)(3) the HUD rule will require that ‘‘[a] reasonable effort to arrange a meeting with the mortgagor shall consist of, at a minimum, two verifiable attempts to contact the mortgagor utilizing methods determined by the Secretary.’’ HUD recently issued guidance in Mortgagee Letter 2024-24 [or the portions of the rule that still will become effective on January 1, 2025.
This requirement includes borrowers who do not live in the mortgaged property and mortgagees where the property is not within 200 miles of the mortgagee, its servicer, or a branch office. HUD decided to extend to July 1, 2025 the requirements to follow the new rule for conducting meetings in such circumstances.
HUD said it was taking this action to permit mortgagees enough time to update their mortgage servicing processes and procedures to comply with a forthcoming mortgagee letter entitled ‘‘Modernization of Engagement with Borrowers in Default.’’
HUD said mortgagees have said that they need sufficient time to update their processes, including making updates, to their information technology, staff training, and mortgagor-facing documents and communication. They also have stated the need to update quality controls, align their procedures for HUD’s new requirements with requirements from other federal agencies, establish new contracts for outreach methods, and update internal documentation requirements, among other things.
Under the extension mortgagees still may optionally elect to comply with the entirety of the Modernization of Engagement with Mortgagors in Default final rule beginning on January 1, 2025.
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