The United States Department of Housing and Urban Development has issued a partial waiver of 24 CFR 203.604, the provision that requires mortgagees to establish face-to-face contact with borrowers during default and loss mitigation intervention. This suspension, which is stated to last for one year, was issued in response to public concerns over the spread of the coronavirus (“COVID-19”). A copy of the waiver can be found here.
The partial waiver provides that mortgagees must establish contact through alternative means or methods – such as phone interviews, email, or video calling services such as Skype, Zoom, WebEx, or FaceTime.
In describing these alternative means of contact, HUD states that continuing the face-to-face, in-person policy during these unprecedented times “is not practical given the public health recommendations being disseminated by local, state, and federal government agencies to limit contact between individuals, in order to contain the spread of the COVID-19 virus.”
HUD states in the partial waiver that without this measure there would be risk of non-compliance by mortgagees, as well as borrowers, that also could contribute to increased risks of default and delinquency, as well as risk exploration of alternative loss mitigation options that may assist borrowers in retaining their homes.
HUD also has addressed additional concerns related to the current COVID-19 crisis in its “COVID-19 Questions and Answers.” A copy can be found here. The document provides, in part, insight into loss-mitigation options that are available to borrowers who may be impacted by COVID-19, stating in pertinent part that:
“As with any other event that negatively impacts a borrower’s ability to pay their monthly mortgage payment, [the Federal Housing Administration’s] suite of loss mitigation options provides solutions that mortgagees should offer to distressed borrowers–including those that could be impacted by the Coronavirus–to help prevent them from going into foreclosure. An example of one of these options is our Special Forbearance for unemployed borrowers. The SFB-Unemployment Option is a Home Retention Option available when one or more of the Borrowers has become unemployed and this loss of employment has negatively affected the Borrower’s ability to continue to make their monthly Mortgage Payment.”