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Foreclosure rescue scams: Separating the victims from the culprits

Dec 10, 2008

HUD eliminates settlement option for mortgagees who fail to renew FHA approvalMortgagePress.comHUD, FHA approval, Mortgagee Letter 2009-01, The U.S. Department of Housing and Urban Development (HUD) has issued Mortgagee Letter 2009-01, announcing that it will no longer permit mortgagees that fail to comply with annual FHA-approval renewal requirements to settle the matter prior to consideration by the Mortgagee Review Board. The Mortgagee Letter rescinds paragraph 4-9 of HUD Handbook 4060.1, REV-2, which allowed mortgagees that had not met the annual renewal requirements to settle the violation with HUD by paying a $1,000 fee. HUD is eliminating this process "to bring more mortgagees into compliance with [its] statutory and regulatory mandates," and to prevent conflicts with its recently revised Mortgagee Review Board regulations. According to HUD, "any failure of a mortgagee or a lender to comply with annual renewal of FHA-approval requirements may be referred to the Mortgagee Review Board." Mortgagees that receive a Notice of Violation for failure to renew must now appeal the Notice pursuant to 24 C.F.R. Part 25. A mortgagee, however, may still cure the violation, which will be taken into consideration by the Board. For a copy of Mortgagee Letter 2009-1, click here.
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