The U.S. Department of Housing & Urban Development (HUD) has been advised that due to a recent change in state laws or state mandated moratoriums, some foreclosures had to be cancelled or stopped and rescheduled to complete all of the new legislative requirements. HUD has announced that it will bear the cost of any delays in the foreclosure process when the servicer had to comply with moratoriums that were beyond their control, and where the servicers were not cited for non-compliance. A 90-day extension is provided to mortgagees where the initial legal action to commence foreclosure has been cancelled to comply with a new state legislation. Where the mortgagee experiences a delay that is beyond its control, because the mortgagee is prohibited from initiating foreclosure due to state law or federal bankruptcy, the mortgagee will be in compliance if foreclosure is commenced within 90 days of the expiration of the prohibition.
A mortgagee letter will be forthcoming, publishing HUD’s requirements. However, these requirements are not introducing new policy, rather they will re-emphasize existing policy guidelines previously published on foreclosure moratoriums.
Click here for more information and a FAQ page from HUD's Web site.