[Federal Register Volume 89, Number 149 (Friday, August 2, 2024)]
[Rules and Regulations]
[Pages 63082-63099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16728]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 203
[Docket No. FR-6353-F-02]
RIN 2502-AJ66
Modernization of Engagement With Mortgagors in Default
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development, HUD.
ACTION: Final rule.
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SUMMARY: HUD's regulations require mortgagees of Federal Housing
Administration insured single family mortgages to meet in person, or
make a reasonable effort to meet in person, with mortgagors who are in
default on their mortgage payments. This rule modernizes those
requirements by amending HUD's regulations to better align with
advances in electronic communication technology and mortgagor
engagement preferences, while preserving consumer protections.
Specifically, this rule revises HUD's in-person, face-to-face meeting
requirements by permitting mortgagees to utilize methods of
communication most likely to receive a response from the mortgagor,
including remote communication methods, to meet with mortgagors who are
in default on their mortgage payments. This rule also expands the
meeting requirement to all mortgagors in default, including mortgagors
who do not reside in the mortgaged property and those with a mortgaged
property not within 200 miles of their mortgagee. This final rule
adopts HUD's July 31, 2023, proposed rule with only minor, non-
substantive revisions.
DATES: Effective January 1, 2025.
FOR FURTHER INFORMATION CONTACT: Elissa Saunders, Director, Office of
Single Family Asset Management, Office of Housing, Department of
Housing and Urban Development, 100 South Charles Street, Bank of
America Building, Tower II, 11th Floor, Baltimore, MD 21201; telephone
number 410-209-6605 (this is not a toll-free number). HUD welcomes and
is prepared to receive calls from individuals who are deaf or hard of
hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
SUPPLEMENTARY INFORMATION:
I. Background
First codified in 1976, HUD's regulations at 24 CFR 203.604 require
mortgagees of Federal Housing Administration (FHA) insured single
family mortgages (mortgagees) to meet in person, or make a reasonable
effort to meet in person, with mortgagors who are in default on their
mortgage payment. This requirement for an in-person meeting with the
mortgagor, commonly referred to as the ``face-to-face meeting''
requirement, originated during a time when mortgage lending and
servicing activities were conducted in person at locations in the local
communities a mortgagee served. At that time, a face-to-face meeting
between the mortgagor and mortgagee was the most effective way to
discuss and facilitate loss mitigation options because knowledgeable
mortgagee staff were available at locations near the mortgaged
property. Beginning in the mid-1990s, many mortgagees began
consolidating origination and servicing activities at centralized
locations. Today, many mortgagees have a national presence and often
employ a single
[[Page 63083]]
national servicing center or a limited number of regional servicing
centers, operate without retail places of business altogether, and tend
to conduct origination and servicing activities with employees and
clients not being in close physical proximity. In addition, mortgagors
show an increased preference to conduct business online or through
other remote methods.
The current face-to-face meeting requirement also reflects a time
when electronic methods for conducting virtual meetings were not widely
available or commonly used. Since 24 CFR 203.604 was last amended,
significant advances have been made in the mortgage industry's use of
technology and mortgagors' access to such, including smartphones,
tablets, and live video communications. Over the years, HUD has updated
certain mortgage servicing policies to increase requirements for
mortgagees to engage with mortgagors in default on their mortgage
payments. To adapt to changing uses of communication technology, in
updates to the FHA Single Family Housing Policy Handbook 4000.1,\1\ HUD
has expanded its acceptable methods for communicating with mortgagors
in default situations, which currently include phone calls, emails, web
portals, and other electronic methods.\2\ In addition to HUD increasing
its requirements for mortgagees to engage with mortgagors in default,
the Consumer Financial Protection Bureau (CFPB) mortgage servicing
regulations at 12 CFR part 1024 and State laws in many jurisdictions
require engagement with mortgagors, causing mortgagees to expand their
outreach processes to offer mortgagors timely loss mitigation options.
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\1\ The FHA Single Family Housing Policy Handbook 4000.1 is
available at https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1.
\2\ FHA Single Family Housing Policy Handbook 4000.1, section
III.A.2.h. Early Default Intervention.
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As a result of mortgagees' expanded outreach processes to
mortgagors and mortgagors' ability to independently research loss
mitigation options, mortgagees reported very few mortgagors who agreed
to participate in face-to-face meetings with their mortgagees prior to
the COVID-19 pandemic, as more thoroughly described in the
Modernization of Engagement with Mortgagors in Default proposed rule
(the proposed rule) that preceded this final rule.\3\
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\3\ 88 FR 49392 (July 31, 2023).
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Due to public health concerns around the spread of COVID-19, in
March 2020, HUD issued a temporary, partial waiver of the face-to-face
meeting requirement found in 24 CFR 203.604, which has been extended on
several occasions and remains in effect until this final rule becomes
effective on January 1, 2025 (collectively, the ``waiver'').\4\ Similar
to the regulation revisions codified in this final rule, the waiver
permitted mortgagees to use alternative methods for contacting
mortgagors, including electronic methods of communication, e.g., phone
interviews, email, video calling services, and other communication
technologies, to meet the requirements of 24 CFR 203.604. With this
waiver in place, mortgagees provided over 2 million mortgagors in
default with loss mitigation assistance. HUD received positive feedback
from mortgagees and consumer advocates related to the added flexibility
to existing loss mitigation outreach requirements permitted by the
waiver.
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\4\ The original waiver issued on March 13, 2020, and subsequent
additional temporary, partial waivers to the face-to-face meeting
requirement in 24 CFR 203.604 are posted on HUD's Housing Waivers
web page, available at https://www.hud.gov/program_offices/administration/hudclips/waivers.
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II. The Proposed Rule
On July 31, 2023, HUD published for public comment the proposed
rule to amend 24 CFR 203.604. For mortgages insured pursuant to 24 CFR
part 203, except mortgages insured on Indian Land pursuant to section
248 of the National Housing Act (Section 248 Mortgages on Indian
Land),\5\ the proposed rule sought to make it more convenient for
mortgagors in default to meet with their mortgagee by revising the
requirement that mortgagees must have a face-to-face meeting with
mortgagors to instead permit mortgagees to meet with mortgagors who are
in default on their mortgage payments either through a face-to-face
meeting or through other communication methods as determined by the
Secretary, including electronic or other remote communication methods
such as telephone or video calls.
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\5\ As described in the proposed rule, HUD proposed no
substantive revisions to the in-person, face-to-face meeting
requirement found in 24 CFR 203.604 for Section 248 Mortgages on
Indian Land. Unlike other single-family mortgage insurance programs
regulated under 24 CFR part 203, the National Housing Act
specifically requires that mortgagees conduct a face-to-face meeting
with mortgagors who are in default on their mortgage payments for
Section 248 Mortgages on Indian Land. Given these statutory
requirements, HUD's proposed revisions to 24 CFR 203.604 as relates
to Section 248 Mortgages on Indian Land were limited to non-
substantive reorganizational edits to the paragraph structure of
Sec. 203.604 to make the requirements for Section 248 Mortgages on
Indian Land easier to understand.
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Additionally, given the proposed expanded methods of communication
with the mortgagor and recent FHA policy updates that make loss
mitigation options available to mortgagors who do not reside in the
mortgaged property, the proposed rule sought to eliminate two of the
exemptions to the requirement for the mortgagee to meet with mortgagors
in default currently found in 24 CFR 203.604(c). The exemptions
proposed to be eliminated were (1) mortgagees are not required to meet
with a mortgagor if the mortgagor does not reside in the mortgaged
property and (2) a meeting with the mortgagor is not required if the
mortgaged property is not within 200 miles of the mortgagee, its
servicer, or a branch office of either. Finally, the proposed rule
sought to amend the definition of a ``reasonable effort'' to arrange a
meeting with the mortgagor to align with the proposed updates regarding
the addition of the option to use electronic or other remote
communication methods as determined by the Secretary to conduct a
meeting with the mortgagor.
III. This Final Rule
After reviewing and considering the public comments received during
the proposed rule stage of this rulemaking, HUD is publishing the final
rule with only minor, non-substantive revisions from the proposed rule.
HUD believes that this final rule will improve mortgagee engagement
with mortgagors, reduce the cost of mortgage default servicing, and
align HUD's regulations with advancements made in electronic
communication technology and in mortgagor communication preferences,
while preserving consumer protections. With the addition of other
Secretary approved options for mortgagees to conduct the meeting with
the mortgagor, the final rule will permit mortgagees to utilize more
flexible communication and scheduling options to meet with the
mortgagor at the mortgagor's convenience. Furthermore, the increased
flexibility will assist mortgagors with disabilities, immuno-
compromised mortgagors, and mortgagors with limited English
proficiency. Additionally, the final rule will reduce the expense
incurred by mortgagees and the difficulties associated with making at
least one trip to see the mortgagor at the mortgaged property to
schedule a meeting with the mortgagor. The final rule also expands the
meeting requirement to all mortgagors in default, including mortgagors
who do not reside in the mortgaged property and those with a mortgaged
property that is not within 200 miles of the mortgagee, its servicer,
or a branch office of either.
[[Page 63084]]
While HUD's revisions to 24 CFR 203.604 update the acceptable
methods that mortgagees may use to meet with a mortgagor in default,
the purpose for the meeting remains the same. The meeting requirement
is the mortgagor's opportunity to meet directly with trained mortgagee
staff who can provide information about FHA loss mitigation options to
assist the mortgagor in curing the default episode and bringing the
FHA-insured mortgage current or otherwise avoiding foreclosure.
Generally, mortgagors are unfamiliar with FHA's home retention loss
mitigation options and do not understand what options like a short-term
forbearance, loan modification, or partial claim entail. Many
mortgagors are also unaware that FHA provides home disposition options
for mortgagors in default who are unable to retain their homes and want
to avoid foreclosure. In addition to the meeting providing an
opportunity for mortgagors in default to meet with knowledgeable
mortgagee staff who can explain available loss mitigation options, the
meeting also provides the opportunity for the mortgagee to begin
collecting the information needed to evaluate mortgagors for FHA's loss
mitigation options.
IV. Public Comments
This public comment section contains a summary of the public
comments that HUD received in response to the proposed rule.
A. Support for the Proposed Rule
Face-to-face meetings are not necessary and communicating with
mortgagors through electronic and other remote communication methods is
preferred.
Commenters in favor of the proposed rule supported a broader range
of communication methods for contacting the mortgagor, such as phone
calls, emails, video calls, and other communication technologies, to
increase the likelihood that a mortgage servicer will receive a
response from the mortgagor and be able to engage in a discussion about
home retention options with defaulted mortgagors. A commenter stated
that broadening the range of communication methods should increase the
likelihood of a successful loss mitigation effort and retention of a
mortgagor's home.
A commenter supported FHA's ongoing efforts to assist mortgagors to
avoid foreclosure and to receive options that help mortgagors in
hardship situations, stating that the proposed rule is a positive step
in the direction of expanding opportunities to offer loan workout
solutions for distressed mortgagors.
A commenter stated that modernizing the permissible methods to
communicate with mortgagors will save time, money, and reduce
foreclosures. Another commenter supported using modernized
communication methods because attempts to reach mortgagors through
face-to-face meetings can be costly, difficult to arrange, and may not
be fully successful in resulting in a meeting with the mortgagor.
One commenter stated that the mortgage servicing industry has for
many years urged HUD to eliminate the outdated requirement for mortgage
servicers to conduct in-person, face-to-face meetings with mortgagors
who are in default on their mortgage payments. The commenter stated
that they support the goal of providing greater flexibility for
mortgage servicers to educate mortgagors on available loss mitigation
solutions through utilizing modern communication technology.
Another commenter stated that the proposed rule offers
communication options for mortgagors that are potentially more
convenient than an in-person, face-to-face meeting. A different
commenter stated that these proposed changes are supported by the data
referenced in the proposed rule and will reduce the regulatory burden
in reaching out to mortgagors in default.
A commenter stated that Sec. 203.604, as written, is costly and
has not been successful. The commenter also stated that there is no
need to require a property visit when mortgage servicers have a Quality
Right Party Contact (QRPC) when using modern methods and tools.
One commenter stated that credit unions have indicated that they
may be able to service their FHA-insured mortgage loans more
efficiently if they do not have to worry about how to address the
burdensome face-to-face meeting requirements and could use technology
to meet with mortgagors from their central servicing headquarters. The
commenter stated that credit unions also believe that the proposed
changes will provide for greater efficiency in the loss mitigation
process, permitting credit unions to provide more timely information to
members in default.
A commenter stated that through the COVID-19 pandemic, mortgage
servicers have simplified their processes to improve mortgagor outcomes
and that mortgagors facing financial hardship should be able to
continue to engage with their mortgage servicers through remote methods
of contact that have proven their effectiveness. Another commenter,
referencing information cited in the proposed rule, stated that the
proposed changes reflect consumer preferences in how consumers use
technology for their banking services in a post-pandemic world.
HUD Response: HUD appreciates the comments and agrees that the
revisions to 24 CFR 203.604 will assist mortgagors in default by
improving their engagement with mortgagees. The meeting described in
Sec. 203.604 is designed to provide information about and steps to
resolve the mortgagor's default and avoid foreclosure. Additionally,
HUD believes that mortgagors with disabilities or difficulty accessing
an in-person meeting will be greatly assisted by the expanded options
that may be used to meet with their mortgagee.
Removal of the 200-mile exemption.
Multiple commenters supported the proposed rule's removal of the
200-mile exemption that provided that a meeting with the mortgagor is
not required if the mortgaged property is not within 200 miles of the
mortgagee, its servicer, or a branch office of either. Some commenters
supported the removal of the 200-mile exemption from the proposed rule
to create equal opportunity for all mortgagors to engage with their
mortgage servicer regardless of where the mortgagor lives.
Commenters stated that because nonbank mortgage servicers without
branch offices increasingly service FHA-insured loans, the 200-mile
exemption effectively eliminates the opportunity for a meeting for many
mortgagors. One commenter stated this is important because nonbank
mortgage servicers have limited branch offices, which could allow the
nonbank servicers to meet the qualifications for the current 200-mile
exemption in many instances.
The commenters also stated that HUD's proposal to retain the
mandatory meeting and remove the 200-mile exemption provides a specific
opportunity for mortgage servicers and mortgagors to prepare and fully
discuss the options that are available to the mortgagor, which will
promote compliance with HUD's regulations. One commenter stated that
they strongly support HUD's decision to remove the 200-mile exemption
because the mandatory meeting will facilitate foreclosure alternatives
under FHA's unique loss mitigation waterfall.
HUD Response: HUD appreciates the comments and agrees that the
change will assist more mortgagors in default. The 200-mile exemption
is no longer relevant for many reasons, including those raised by the
commenters. HUD agrees with the comment that removing
[[Page 63085]]
the 200-mile exemption from the rule will create equal opportunity for
all mortgagors to engage with their mortgage servicer, regardless of
the mortgagor or mortgagee's physical location.
Removal of the mortgagor not residing in the mortgaged property
exemption.
A commenter stated that all mortgagors in default should be able to
engage with their mortgage servicer regardless of whether the mortgagor
occupies the mortgaged property.
HUD Response: HUD appreciates the comment and agrees that the
change will assist more mortgagors in default. The non-occupant
exemption is no longer relevant, as HUD has expanded its loss
mitigation assistance to all mortgagors in default, including
mortgagors who do not reside in the mortgaged property. This revision
to Sec. 203.604 will create equal opportunity for all mortgagors to
engage with their mortgage servicer, regardless of the location of the
mortgaged property.
Mandatory meetings should occur early in the default process.
Commenters stated that they strongly support HUD's proposal to
retain the mandatory meeting that mortgage servicers must hold with
mortgagors early in the default process.
One commenter stated that if mortgage servicers comply with HUD's
rule to conduct the meeting relatively early in the default cycle, the
arrearage at the time of a meeting is likely to be of short duration
and therefore more manageable through timely application of FHA's loss
mitigation waterfall. The commenter stated that they support HUD's
further clarification that the mortgage servicer must conduct the
meeting prior to foreclosure.
The commenter also stated that the mandatory meeting is designed to
ensure that mortgage servicers consider loss mitigation options early
in the process in order to avoid prolonged defaults by mortgagors and
to minimize risk to the Mutual Mortgage Insurance Fund (MMIF). The
commenter stated that mortgage servicers have frequently argued in
court that their post-foreclosure actions satisfy the regulation in the
absence of pre-foreclosure compliance. The commenter described the case
of Wells Fargo Bank v. Awadallah, 41 NE3d 481 (Ohio Ct. App. 2015),
where the lender claimed that it did not have to visit the home prior
to filing foreclosure because it engaged in a mediation session
scheduled by the court after a foreclosure case had been filed. The
commenter stated that the court in Awadallah rejected this argument,
reversing the trial court's issuance of a decree of foreclosure. The
commenter stated that advocates continue to face this type of argument
in court, and HUD's further clarification is warranted. The commenter
stated that loss mitigation is important for mortgagors at all stages
of default, and that mediation is an important tool; however, efforts
to address defaults after foreclosure has been filed are not a
substitute for the early intervention involved in the mandatory
meeting.
HUD Response: HUD appreciates the comments and agrees that it is
important to retain the meeting requirement between mortgagors and
mortgagees early in the default and prior to foreclosure. This meeting
provides an important step in helping mortgagors resolve their default
and avoid foreclosure.
B. Objections to the Proposed Rule
Benefits of the face-to-face meeting and limits of remote
communication methods.
Some commenters expressed generally that they do not support the
proposed rule. One commenter supported the modernization of the
requirements in 24 CFR 203.604 but did not support the approach
outlined in the proposed rule.
Commenters stated that in-person, face-to-face contact programs are
highly effective and have helped countless mortgagors re-engage with
their mortgage servicers to pursue repayment and loss mitigation
solutions. A commenter stated that the removal of the face-to-face
contact attempt requirement in Sec. 203.604 will add significant risk
to all stakeholders, including the mortgagor, the mortgage servicer,
and HUD. Commenters stated that the assistance from the in-person,
face-to-face outreach to mortgagors has irreplaceable value and is
immeasurable compared to any other mortgagor outreach tool available.
Additionally, commenters stated that in-person, face-to-face contact
requirements exist to assist mortgagors who need the most help, are
behind on mortgage payments, and are unsure what help is available to
them. One commenter stated that informing mortgagors about the
advantages of the direct meeting option makes it more likely that they
will engage in the loss mitigation process.
A commenter stated that without the in-person, face-to-face contact
attempt, there is a significant increase in the risk of foreclosure and
that foreclosure is detrimental to a family and very costly to mortgage
servicers. The commenter also stated that the cost of foreclosure would
greatly exceed the cost to perform an in-person visit to the property,
especially given the low cost of mortgagor outreach often provided by
professional borrower outreach companies.
Commenters stated that certain people, like older people, members
of underserved communities, and those who live in inner cities and
rural areas especially benefit from the face-to-face meeting. The
commenters said that these populations may be less adept in their use
of technology and the in-person requirement helps bridge a
communication gap. Commenters further stated that these communities
will be most negatively impacted by the proposed rule.
One commenter stated that the in-person, face-to-face meeting
requirement is important because, regardless of whether or not in-
person contact is made during a visit, a contact letter or loss
mitigation package is hand-delivered to the mortgagor or left at the
property. The commenter stated that this is important because it
informs the mortgagor that there are mortgage assistance options
available and it assures the mortgagor that the mortgage servicer wants
to help the mortgagor. Commenters said that although the meeting
required by Sec. 203.604 could be conducted virtually, the in-person
attempt to contact the mortgagor is necessary in many cases to bring
awareness to the mortgagor that the mortgagee is trying to contact the
mortgagor.
Commenters stated that a benefit of the face-to-face meeting is it
allows the mortgage servicer to comfort the mortgagor during their
hardship, which may cause embarrassment, fear, or reluctance to contact
the mortgage servicer. A commenter stated that the in-person, face-to-
face contact from the mortgage servicer to the mortgagor helps instill
confidence in the mortgagor.
Commenters stated that the benefit of the face-to-face meeting in
24 CFR 203.604 is the mortgage servicer is required to have the
mortgagor meet with someone who has the authority to propose and accept
reasonable repayment plans. A commenter said that such an individual
with this authority would also be able to resolve other critical issues
and problems that exist between the mortgagee and mortgagor. The
commenter stated that by eliminating the face-to-face requirement in 24
CFR 203.604, and instead permitting remote communication methods,
mortgagors will not be able to speak with a mortgage servicer
representative who cares or understands mortgagors' issues.
A commenter said that the face-to-face contact requirement is an
effective tool that mortgage servicers should use to
[[Page 63086]]
engage mortgagors who have not responded to contact attempts made
through remote communication methods.
Commenters stated that it is important for both the mortgagor and
mortgage servicer to continue having in-person, face-to-face contact
because this will enhance mortgage servicer QRPC and ultimately
increase loan workouts to help more mortgagors remain in their homes.
One commenter stated that the face-to-face contact requirement has
helped mortgagors for decades and allows mortgage servicers to
communicate with more mortgagors and increase full and partial payments
made in an effort to cure the mortgage default. The commenter also said
that FHA-insured loans are considered high risk by their nature, and
that FHA-insured mortgages require additional controls to mitigate
risk, such as the face-to-face requirement. Another commenter believed
that visits to the property would lead to loan workouts that not only
allow thousands of mortgagors to retain their homes but would reduce
HUD credit losses by more than $250 million.
A commenter stated that remote contact efforts alone are
insufficient to maximize mortgagor response. Commenters stated that
many obstacles make it improbable that a mortgage servicer will be able
to contact a defaulted mortgagor using remote communication methods,
referencing obstacles such as tools that block toll free numbers, laws
preventing autodialing to cell phones without consent, email spam
filters, and mortgagors ignoring calls from unknown numbers.
One commenter stated that the proposed rule would be
counterproductive to the CFPB's mission to protect consumers. The
commenter stated that it is incorrect to assume that all people who own
a home use email, text messaging, mail, and phone calls. The commenter
also stated that members of underserved communities who do not respond
to their mortgage servicer or have access to email, text message, or
phone calls represent a large portion of the demographic that the CFPB
is designed to protect.
A commenter stated that the information regarding ``consumer
communication preferences'' discussed in the proposed rule conveys
misaligned and misleading feedback. The commenter stated that the
consumer communication preferences referenced in the proposed rule
relate to routine correspondence from a mortgage servicer, e.g.,
monthly statements, notices, escrow analysis statement. The commenter
stated that these communication preferences may be relevant to
mortgagors not in default on their mortgage; however, the preferences
are not relevant to mortgagors who are behind on payments and
potentially ignoring a mortgage servicer's remote communication contact
attempt out of a feeling of embarrassment or helplessness or a fear of
losing their home to foreclosure.
Other commenters said that, while remote communication methods may
be successful for a portion of the default mortgagor population, the
face-to-face contact attempt should still be performed as a final
attempt to equip mortgagors with vital information that could be the
difference between becoming current on the loan and losing the home to
foreclosure.
HUD Response: HUD appreciates the comments. HUD agrees that it is
important to retain the required meeting to help mortgagors resolve
their default and avoid foreclosure. HUD believes that by expanding
mortgagees' outreach options, the methods for conducting the meeting,
and the requirement to hold the meeting with all mortgagors in default
prior to foreclosure will reduce the risk of foreclosures, lessen
impacts to HUD's MMIF, and decrease costs for mortgagees. HUD believes
making two verifiable attempts is sufficient to arrange this meeting,
in addition to the multiple outreach requirements as part of early
default intervention. HUD appreciates the commenter's concern regarding
outreach methods and will take these comments into consideration in
developing implementation policy. HUD also agrees with the commenter
that a benefit of the required meeting is that the mortgagor has an
opportunity to speak with a mortgagee who has the authority to propose
and accept reasonable repayment plans. This benefit will be retained
while the methods available for conducting the meeting are expanded.
For mortgagors with FHA-insured mortgages, starting in early 2020,
HUD temporarily waived the in-person meeting requirement due to public
health concerns around the COVID-19 pandemic. Through this temporary
waiver, HUD gained critical experience over four years allowing
mortgagors to employ alternative methods to in-person outreach and in-
person meetings. Overall, mortgagees achieved great success in helping
mortgagors resolve their default through alternative measures. During
the period the waiver has been in place, over 2 million mortgagors in
default were successfully assisted to bring their mortgages current
after a default episode. Furthermore, in a Mobile Fact Sheet updated in
January 2024, the Pew Research Center reported that ``today, 95% of
U.S. adults say they use the internet'' and that ``the vast majority of
Americans (97%) now own a cellphone of some kind'' and that 90% own a
smartphone, up from 35% in 2011.\6\ As reported in the Mobile Fact
Sheet, the data reflects a very high use of the internet, cellphones,
and smartphones extends across income, race and ethnicity, age, and
geography.
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\6\ Pew Research Center, Mobile Fact Sheet, Tech Adoption Trends
(Jan. 31, 2024), available at https://www.pewresearch.org/internet/
fact-sheet/mobile/
#:~:text=The%20vast%20majority%20of%20Americans,a%20cellphone%20of%20
some%20kind.
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By expanding this meeting to all mortgagors in default, the
outreach methods, and the means of conducting, the meeting will help
more mortgagors avoid foreclosure, including those with disabilities,
who are immuno-compromised, and whose schedules and other obligations
make an in-person meeting difficult.
The updates are intended to modernize HUD's current in-person,
face-to-face meeting requirement by permitting mortgagees to utilize
additional methods of communication, as determined by the Secretary,
that are most likely to receive a response from the mortgagor,
including electronic and other remote communication methods. Although
HUD will no longer require the meeting be conducted in person, HUD is
not precluding the meeting from being held in-person if the mortgagee
offers such an option and it is the mortgagor's preference.
Commenters say that property visits help mortgagors avoid
foreclosure and reduce loss/costs.
One commenter cited information that described a five-month case
study conducted on a nationwide in-person, face-to-face program with
mortgagors who were greater than 45 days past due on their mortgage
payment. The commenter cited the following data from the case study: 27
percent of the mortgagors in the case study called in after the in-
person visit by the mortgage servicer; 40 percent of the mortgagors in
the case study made a payment; and an additional 6.6 percent of the
mortgagors in the case study were put into a loan workout. The
commenter stated that the data on mortgage servicers provided by the
Mortgage Bankers Association (MBA) listed in the proposed rule states
that a mortgage servicer invested $3.9 million but only realized a 5.8
percent interview acceptance rate. The commenter stated that if this
data is applied to the statistics produced in the
[[Page 63087]]
five-month case study, the actual value of that mortgage servicer's
face-to-face program can be simulated. The commenter provided the
following estimates: $3.9 million in outreach costs equates to
approximately 78,000 mortgagors contacted through a mortgage servicer's
face-to-face program, which would yield 21,060 mortgagors contacting
the mortgage servicer following an in-person visit by the mortgage
servicer, 31,200 mortgagors making a full or partial mortgage payment,
and 5,148 mortgagors being placed on a loan workout.
A commenter cited data from what the commenter described as a 13-
month study of mortgagor response data reported by a large mortgage
servicer. The mortgage servicer performed a national face-to-face
mortgagor outreach campaign where the mortgagors were approximately 60
days past due on their mortgage loan. As described by the commenter,
the key performance indicators monitored in the 13-month study include:
(1) payments received by the mortgage servicer after the face-to-face
contact attempt was performed; (2) new loss mitigation workouts
initiated after the face-to-face contact attempt was performed; and (3)
mortgagors who called the mortgage servicer after the face-to-face
contact was performed. As stated by the commenter, as a result of the
noted mortgage servicer's face-to-face contact program, 40.63 percent
of mortgagors made a full or partial loan payment, 4.81 percent pursued
a loss mitigation workout to cure the delinquency, and 26.58 percent
called their mortgage servicer.
Another commenter provided data demonstrating that property visits
help mortgagors avoid foreclosure and reduce losses and costs. The
sources cited by the commenter included a blog post published on the
Federal Housing Finance Agency Insights Blog in 2023; HUD's Annual
Report to Congress regarding the Financial Status of the Federal
Housing Administration Mutual Mortgage Insurance Fund for fiscal year
(FY) 2022; a report written by RMA Associates, LLC in 2022; and an
article published on the Urban Institute's website in 2018.
The commenter stated that mortgage servicers report that, in all
market environments, 20 to 30 percent of distressed mortgagors are
unresponsive to traditional phone, electronic, and mail contact
attempts, including being unresponsive to mortgagees' passive contact
attempts. The commenter stated, however, that in-person property visits
communicating an offer to help distressed mortgagors, even without a
direct contact, lead many unresponsive mortgagors to reach out to their
mortgagees. The commenter stated that many financial institutions that
hold mortgage credit risk pay for visits to the mortgaged property
because this contact method works.
The commenter, describing cited market data, stated that the data
from one industry service provider shows that a visit to the mortgaged
property of unresponsive delinquent mortgagors led 40 percent of these
unresponsive mortgagors to contact their mortgage servicer. The
commenter stated that of those mortgagors who contacted their mortgage
servicer, half resolved their loan delinquency without foreclosure. The
commenter stated that, while a portion of unresponsive mortgagors are
expected to self-cure, the proposed rule would result in approximately
20 percent of unresponsive mortgagors proceeding to foreclosure who
could avoid foreclosure if a visit to the property is conducted.
The commenter went on to state that, as of year-end for FY 2022,
the commenter estimates that visits to the mortgaged property of
delinquent mortgagors who are unresponsive to initial contact attempts
would lead to thousands of additional mortgagors avoiding foreclosure
and retaining their homes. The commenter also estimated that, as of
year-end FY 2022, property visits to delinquent mortgagors who are
unresponsive to initial contact attempts could reduce the net present
value of HUD credit expenses by more than $250 million. The commenter
stated that in a future year similar to FY 2022, property visits could
reduce the total claim amount by an estimate of more than $40 million.
The commenter further estimated that the cost of visits to the
mortgaged properties of delinquent mortgagors who are unresponsive to
initial contact attempts would be $3.4 million.
One commenter described laws in various jurisdictions that require
mortgage servicers to offer mortgagors in default the opportunity to
participate in a face-to-face meeting as part of foreclosure-prevention
and mediation program with the mortgage servicer. The commenter stated
that rates at which mortgagors accept an offer for a meeting has varied
by program and jurisdiction; however, at the lower end of the range,
between 20 and 30 percent of the mortgagors offered the opportunity to
participate in a face-to-face foreclosure-prevention meeting have
chosen to do so. The commenter described participation rates of
mortgagors in many different jurisdictions having face-to-face
foreclosure-prevention meetings with their mortgage servicers. The
commenter also stated that scheduled meetings, including those held
face-to-face, are effective in preventing foreclosures and increasing
mortgage servicers' compliance.
The commenter stated that, while the data collected about the
existing State and local laws that facilitate meetings is of great
importance in determining the proper conclusions to draw from the
mortgage servicers' data, it is essential to keep in mind that these
laws are not a substitute for the requirements of Sec. 203.604. The
commenter stated that fewer than a dozen States have enacted a legal
requirement for mortgage servicers to offer a face-to-face meeting to
mortgagors in default. The commenter stated that these State and local
requirements are typically triggered by the mortgage servicer taking a
concrete step to begin foreclosure proceedings where the loan has been
accelerated and foreclosure documents have been filed or recorded. The
commenter stated that HUD's conclusion that defaulted mortgagors show a
preference for meeting with their mortgage servicers using technology
instead of face-to-face is inconsistent with the data about mortgagor
attendance at State and local foreclosure prevention and mediation
programs cited by the commenter. The commenter highlighted that the
data it cited regarding State and local foreclosure prevention and
mediation programs is current as of 2022, when current technologies
exist, so the existence of the technologies does not mean that they no
longer want or value in-person meetings.
Commenters stated that the success of State and local foreclosure
prevention and mediation programs for mortgagors in foreclosure
demonstrates that mortgagors want to engage with their mortgage
servicers. The commenters stated that, like the HUD rule, these
programs set up face-to-face meetings between mortgagor and mortgage
servicers. As stated by the commenters, participation in the programs
has ranged from 20 to 80 percent of eligible mortgagors. The commenters
stated that the programs have documented high rates of success in
avoiding foreclosures. The commenters stated that these programs
succeed because they set standards and hold mortgage servicers
accountable for complying with them.
A commenter stated that, given the data showing successful outcomes
from various jurisdictions that require mortgage servicers to offer
mortgagors in default the opportunity to participate in face-to-face
foreclosure-prevention meetings, including with the mortgage servicer,
the commenter disagrees with
[[Page 63088]]
HUD's conclusion that mortgagors in default do not want to meet
directly with their mortgage servicers, and instead, have demonstrated
a ``preference'' for virtual meetings. The commenter stated that the
attitude of the mortgage servicer staff and the resources the mortgage
servicer devotes to communication can make a critical difference for
outcomes in default servicing.
HUD Response: HUD appreciates the comment and shares the
commenter's concerns to help mortgagors in default avoid foreclosure
and to avoid costs and losses relating to foreclosures. HUD appreciates
the data provided by the commenters but does not have the ability to
validate the information and data cited by the commenters. HUD notes
that commenters did not provide data to demonstrate that these
mortgagors would otherwise not engage with their servicer and that
these mortgagors ultimately avoided foreclosure. As stated previously,
HUD believes that by expanding mortgagees' outreach options, the
methods for conducting the meeting, and the requirement of holding the
meeting with all mortgagors in default prior to foreclosure will reduce
the risk of foreclosures, lessen impacts to HUD's MMIF, and decrease
costs for mortgagees.
HUD agrees with the commenter's statement that rates at which
mortgagors accept an offer for a meeting vary significantly. Therefore,
by expanding the methods for mortgagee outreach to mortgagors, and the
means of conducting these meetings, HUD believes that more mortgagors
will participate.
HUD also appreciates the commenter sharing information about State
and local foreclosure-prevention and mediation programs. However, HUD
recognizes that the foreclosure-prevention program data provided is not
a suitable comparison to the requirements under 24 CFR 203.604 for
several reasons, including that mortgagors participating in a
foreclosure-prevention or mediation program are already in the
foreclosure process. The requirements under 24 CFR 203.604 require
engagement with mortgagors early in default and prior to initiating
foreclosure.
HUD appreciates the commenters' concerns about mortgagee compliance
with default servicing requirements and is developing guidance to
ensure that mortgagees properly comply with the requirements of 24 CFR
203.604 to assist mortgagors in resolving their default and avoiding
foreclosure. HUD agrees that the requirements in 24 CFR 203.604 do not
replace mortgagees' requirements to comply with other laws, including
any State or local laws that mandate participation in a foreclosure-
prevention program.
The proposed rule does not adequately address the issue of
unresponsive mortgagors.
One commenter stated that the proposed rule lacks a clear solution
for engaging defaulted mortgagors who are unresponsive. The commenter
said that in later stages of default, mortgagors are harder to reach
and, if not cured, the mortgage servicer is forced to foreclose.
Another commenter said that prior to pursuing face-to-face contact
at the mortgaged property, a mortgage servicer will have already
exhausted the use of remote communication method efforts for upwards of
60 days. The commenter stated that the proposed rule offers no
replacement for a face-to-face contact but instead simply reduces the
required level of due diligence that is required to be performed to
cure a default on a mortgage.
HUD Response: HUD agrees with the commenters' concerns about
reaching unresponsive mortgagors in default. The primary goal of this
rulemaking is not to address unresponsive mortgagors, but HUD believes
these revisions may improve the responsiveness of mortgagors in default
by allowing mortgagees to leverage various communication options to
engage with mortgagors and conduct the meeting.
Mortgagors may face different circumstances when entering into
mortgages compared to mortgagors in default.
One commenter stated that the analogy in HUD's proposed rule
between online mortgage originations and foreclosure avoidance is
unreliable because mortgagors facing foreclosure are in a starkly
different economic situation than mortgage applicants. The commenter
stated that mortgagors facing foreclosure are in a financial crisis
and, among mortgagors, they are probably the most likely to have lost
their home internet access or have out-of-date, unreliable, or broken
smartphones or computers. The commenter stated that mortgagors may be
able to travel to their mortgage servicer for a face-to-face meeting
but may not be able to restore their internet service or pay for a new
computer or smartphone.
Another commenter stated that references in the proposed rule to
the growth of technology in terms of completing mortgage applications
have nothing to do with using similar technology to assist mortgagors
in saving their homes and avoiding foreclosure. The commenter stated
that the use of technology in mortgage originations with the mortgagor
meetings should not be equated to the use of technology with mortgage
servicers for the meeting described in 24 CFR 203.604.
Another commenter stated that HUD incorrectly compared different
contexts, specifically relating the increase in the use of automated
processes to originate mortgages to mortgagors' communication
preferences after a default episode. The commenter stated that
mortgagors who have fallen behind in payments often face barriers of
shame and fear when a mortgage servicer contacts them and the mortgage
servicer is an entity that the mortgagor did not choose. The commenter
stated that establishing trust is a much greater concern in the default
servicing context than is the case for loan origination.
HUD Response: HUD appreciates and shares the commenter's concern
about assisting mortgagors in default and preventing foreclosure. HUD
understands the commenters' concern that references to data regarding
mortgagor communication preferences when originating a mortgage are not
exactly the same as those for mortgagors' communication preferences
when experiencing a default. As HUD acknowledged in the proposed rule,
some of the studies were focused on origination, not foreclosure. HUD
agrees with these commenters that there are differences between
origination and foreclosure. HUD pointed to this trend in origination
only as part of a larger point that mortgagor communication preferences
have evolved, and mortgagees are moving to technology solutions to meet
this demand.
As mentioned by the commenter, HUD agrees that fear and shame may
prevent a mortgagor in default from participating in an in-person
meeting with their mortgagee, an entity whom the mortgagor did not
choose. However, for some mortgagors who feel such shame, the converse
could also be true and allowing mortgagees to use expanded outreach
tools to engage mortgagors, and permitting the use of remote
technologies to conduct the meeting, may help reduce the shame that
these mortgagors may otherwise feel if asked to participate in a face-
to-face meeting.
C. Revisions to the Proposed Rule and HUD Guidance
HUD should revise the requirements regarding mandatory meetings.
Commenters stated that mortgage servicers that fail to conduct the
mandatory meeting with mortgagors
[[Page 63089]]
should not have the right to proceed to foreclosure.
One commenter said that a face-to-face contact attempt should be
conducted at the mortgaged property prior to day 61 of default to
increase mortgagor engagement early in the default cycle to reduce the
risk of foreclosure. The commenter stated that once contact is made
with the mortgage servicer, a ``face-to-face meeting'' could then be
scheduled and conducted by phone or other virtual means.
Additionally, the commenter stated that it is important that the
final rule specifies that the mortgagor should determine the method of
communication that best facilitates that mortgagor's participation. The
commenter said that mortgage servicers should provide multiple options
for accessing the meeting. The commenter stated that they understand
the proposed rule as continuing to allow mortgagors the option to have
the meeting conducted face-to-face as one of the options, and that
certain mortgagors may prefer video conferencing to an in-person
meeting because it is more convenient.
The commenter stated that on the other hand, HUD must prohibit
mortgage servicers from limiting mortgagors to a telephone meeting or a
phone call. The commenter said that HUD rejected such a proposal in
1976, when HUD first developed the meeting requirement and a
commentator proposed that HUD allow a telephonic interview to satisfy
the meeting requirement. The commenter stated that HUD rejected this
proposal, noting that phone calls could play a role in the meetings,
but if the calls ``did not produce results,'' mortgage servicers must
use other means that allow for a more direct interview. The commenter
stated that if in 1976 HUD considered reliance solely on telephone
calls for meetings to be inappropriate, the same concern should be
heightened today. The commenter stated that with the proliferation of
offshore vendors, robocall platforms, and privacy concerns, telephone
calls will not be the desired option for many mortgagors. The commenter
stated that mortgagors, not the mortgage servicers, must have the final
say on which form of communication will make the meeting most
productive.
Additionally, the commenter stated that at the meeting the mortgage
servicer must assess the mortgagor for all available options and
document that it did so. The commenter stated that if an option is
denied, the representative must explain and document the reason for the
decision, and HUD should require the mortgage servicer to provide the
mortgagor with a written summary of the meeting, including the identity
of all individuals present. The commenter stated that this summary will
promote mortgagor understanding and focus HUD's oversight of
compliance.
HUD Response: HUD appreciates the comments and agrees that mortgage
servicers must conduct, or attempt to conduct, a meaningful and
productive meeting with mortgagors prior to foreclosure. Although HUD
has not historically considered reliance solely on telephone calls to
be appropriate to satisfy the mandatory meeting requirement, due to the
growth of digital and global commerce since 1976, particularly in the
mortgage industry, and changes in consumer behavior, HUD has determined
that face-to-face meetings are not always the most effective way to
engage with a mortgagor prior to foreclosure. HUD agrees with the
commenter that mortgage servicers must make a good faith attempt to
establish live contact with the mortgagor and conduct a meaningful pre-
foreclosure meeting. HUD appreciates the detailed recommendations,
including the recommendation to allow the mortgagor to select which
method they prefer to use to participate in the required meeting, and
will take these comments into consideration in developing
implementation policy regarding specific guidance on how and when
mortgagees must attempt to arrange and conduct the mandatory meeting.
Although HUD will no longer require the meeting be conducted in person,
HUD is not precluding the meeting from being held in-person if the
mortgagee offers such an option and it is the mortgagor's preference.
HUD acknowledges the commenter's concern about mortgagee compliance and
will consider how to address that as part of implementation of the
final rule.
HUD should revise its guidance relating to the requirements of 24
CFR 203.604.
Commenters urged HUD to revise its guidance to ensure that mortgage
servicers follow the spirit of Sec. 203.604 and to require that a
scheduled meeting be conducted with certain minimal procedural
standards. The commenters stated that HUD should provide guidance
regarding the letter and structure of the meeting in the following
ways: (1) the mortgage servicer must provide specific notice regarding
scheduling of the meeting so that mortgagors understand what options
are offered for the meeting and its purpose; (2) the mortgage servicer
must give the mortgagors options of when the meeting will be held so
that it does not interfere with their schedules and so mortgagors have
time to prepare; (3) the mortgage servicer should provide mortgagors
with options on how the meeting should be conducted, including an
invitation to involve an advocate in the meeting and to hold the
meeting in person, if feasible; (4) the mortgage servicer
representative who is present must be trained in FHA loss mitigation
and have authority to determine eligibility; (5) the mortgage servicer
must document the meeting and share the meeting summary with the
mortgagor; and (6) the mortgage servicer must develop a written plan
that describes the concrete steps it has taken to implement the meeting
requirement and this plan must be integrated in HUD's quality control.
A commenter stated that HUD must explicitly require the mortgage
servicer to schedule the meeting with the mortgagor in advance so that
the mortgagor is able to have the meeting at a time that does not
conflict with work, childcare obligations, or other significant life
issues. The commenter stated that the mortgagor must have reasonable
time to prepare for the meeting, including to assemble documents,
prepare questions, review the mortgage servicer's documents, and
arrange for a housing counselor or other advocacy assistance.
Another commenter suggested that HUD update the FHA Single Family
Housing Policy Handbook 4000.1 to make clear that among the available
options, a mortgage servicer may, but is not required to, offer or
provide an in-person meeting to the mortgagor. The commenter stated
that unless HUD makes clear that the in-person meeting is not required
by the mortgage servicer, some mortgagors may demand a face-to-face
meeting and the mortgage servicer would be required to fly
representatives out to the mortgagors in other States or retain a local
vendor to handle the meeting.
HUD Response: HUD appreciates the detailed recommendations and will
take these comments into consideration in developing implementation
policy, including specific guidance on the information that mortgagees
must provide to mortgagors prior to the meeting, how and when
mortgagees must attempt to arrange and conduct the mandatory meeting,
and how mortgagors select their preferred method to participate in the
meeting.
HUD should revise the requirements regarding mandatory notices to
mortgagors.
A commenter stated that notices to mortgagors must clearly identify
the loan as subject to HUD guidelines and not rely on generic content
designed for
[[Page 63090]]
all mortgagors in the mortgage servicer's portfolio. The commenter
stated that the notice should identify and briefly describe the major
HUD home retention and home disposition loss mitigation options,
including forbearance, partial claims, modifications, pre-foreclosure
sales, and deeds in lieu. The commenter stated that this is especially
important given HUD's unique loss mitigation options and the persistent
failure of mortgage servicers to offer the proper option. The commenter
stated that HUD should provide a model for mortgage servicers to use
that describes these options. The commenter further stated that the
notice should identify any financial or other information the mortgagor
should have available for a meeting.
Additionally, the commenter stated that if HUD ends the requirement
for the personal delivery of written notices of the opportunity for
meetings, it must replace the requirement with a reliable alternative.
The commenter stated that the current rule requires certified mail,
which is extremely valuable to ensure that the notice was properly sent
and received. The commenter stated that in addition to certified
mailing of the notice, it should also be sent by regular mail because
that is generally faster than certified mail and many mortgagors resist
certified mail. The commenter stated that mortgage servicers must be
informed that they cannot rely solely on electronic communications to
notify mortgagors of the meeting opportunity. Another commenter stated
that the proposed rule, as drafted, would increase the number of
mortgagors who lose their homes through foreclosure and significantly
increase HUD's credit losses. The commenter stated that revising Sec.
203.604 by eliminating the requirements of sending at least one letter
certified by the Postal Service and at least one trip to the mortgaged
property to instead require two verifiable attempts to contact the
mortgagor utilizing methods determined by the Secretary would have a
negative impact on mortgagors and the MMIF because a mortgagee would be
permitted to discontinue efforts to contact delinquent mortgagors after
two failed attempts.
The commenter said that so long as Sec. 203.604 mandates service
of a written notice of the meeting option, any ``consent'' by a
borrower to accept an electronic record as a substitute for the written
notice will be unenforceable. The commenter said the Electronic
Transactions in Global and National Commerce (E-sign) Act allows
consumer consent to an electronic record that can override a legal
requirement for a written notice if certain safeguards are implemented,
citing to 15 U.S.C. 7001(c). However, the commenter said the E-Sign's
general allowance for a waiver that permits reliance on electronic
records does not apply to foreclosure-related notices and cited 15
U.S.C. 7003(b)(2)(B).
HUD Response: HUD appreciates the comments and agrees with the
commenters' concerns that required notification to mortgagors must be
provided in ways that will be reliable and verifiable. HUD appreciates
the detailed recommendations and will take these comments into
consideration in developing implementation policy regarding specific
guidance on the content of the notice to mortgagors and how and when
mortgagees must attempt to arrange and conduct the mandatory meeting.
Existing policy in the FHA Single Family Housing Policy Handbook 4000.1
currently outlines early delinquency engagement requirements, including
notices, disclosures, and contact requirements. Any necessary changes
to these requirements will be addressed in implementation policy. HUD
will also ensure that all electronic notice and signature requirements
are in line with the applicable statutory requirements.
The mortgage servicer should make clear the purpose of the meeting.
A commenter stated that the most important thing that mortgage
servicers should do when meeting with, or scheduling the meeting with,
the mortgagor is to make clear that the purpose of the meeting is to
assist the mortgagor in avoiding foreclosure and to provide options to
help keep the mortgagor in their home and that the mortgagor should not
fear they might lose their home on the day of the meeting.
HUD Response: HUD appreciates the comments and shares the
commenter's position that the purpose of the required meeting with the
mortgagee is to inform the mortgagor of their options to resolve their
default and avoid foreclosure. HUD will take these comments into
consideration in developing implementation policy, including specific
information that mortgagees must provide to mortgagors and how and when
mortgagees must attempt to arrange and conduct the mandatory meeting.
HUD should replace the term ``meeting'' in 24 CFR 203.604(a)(1) and
define other specific terms.
One commenter stated that HUD should replace the term ``meeting''
with an alternative term in Sec. 203.604(a)(1), such as ``engagement''
or ``contact.'' The commenter stated that the term ``engagement''
should be defined as ``an activity where an authorized human
representative of the mortgagee communicates to a mortgagor regarding
available loss mitigation options through acceptable methods of
communication in real time.'' The commenter stated that use of the term
``meeting'' suggests in-person contact, and thus, undermines the
proposed rule's revisions to communicate with mortgagors online or
through remote methods. The commenter stated that, in contrast,
creating an ``engagement'' standard clearly effectuates and helps avoid
unnecessary confusion regarding the proposed rule's purpose to
modernize contact with a mortgagor in default, while recognizing the
inefficiency of an in-person meeting. The commenter stated that for
mortgage servicers to properly implement an engagement standard,
effective FHA Single Family Housing Policy Handbook 4000.1 guidance
should clearly describe how mortgage servicers may conduct their
engagement with distressed mortgagors. The commenter also stated that
the adoption of an ``engagement'' standard further aligns FHA's Early
Default Intervention standards with Fannie Mae and Freddie Mac's
definition of QRPC.
The commenter also encouraged HUD to define the term ``acceptable
methods of communication.'' The commenter stated that HUD should define
``acceptable methods of communication'' to include ``efforts such as
outbound telephone calls, web, portal, text, email, or remote or
electronic means, such as virtual/online/video calls, as outlined under
the FHA Single Family Housing Policy Handbook 4000.1, III.A.2.h.iv
(Communication Methods). Acceptable methods of communication can
include `in-person' as an option.''
HUD Response: HUD appreciates the commenter's interest in using the
most relevant term for this requirement and believes that the term
``meeting'' best reflects the type of required engagement that the
mortgagee must conduct or attempt to conduct with the mortgagor in
default. ``Engagement'' and ``contact'' are broad terms, whereas this
rule refers to a meeting with specific purpose. By specifying that this
is a meeting, HUD is reiterating its importance as well as HUD's
commitment to retaining this requirement. HUD will take these comments
into consideration in developing implementation policy that clarifies
acceptable methods of communication. Furthermore, this rule does not
preclude mortgagees from using additional engagement or contact efforts
to assist the mortgagor in
[[Page 63091]]
resolving the delinquency to avoid foreclosure.
HUD should align the requirements to arrange the engagement under
the proposed 24 CFR 203.604 with FHA's early default intervention
standards.
One commenter stated that a mortgage servicer's engagement with a
mortgagor or a mortgage servicer's reasonable effort to arrange such an
engagement should align with FHA's existing early default intervention
standards. The commenter stated that mortgage servicers conduct
exhaustive outreach strategies to establish contact with delinquent
mortgagors to meet the early intervention servicing requirements of the
CFPB, FHA, and various State laws. The commenter stated that HUD
guidance should clearly state that compliance with FHA standards is
sufficient to meet a mortgage servicer's obligations under the updated
rule. Specifically, the commenter requested that guidance clarify that
an outbound telephone call where loss mitigation is discussed with a
mortgagor constitutes the required contact.
The commenter also stated that by aligning the proposed changes
with FHA's existing early intervention standards, mortgage servicers
are provided with discretion to offer a variety of appropriate methods
of communication. The commenter said this flexibility also eliminates
the need for mortgage servicers to send a separate letter to inform
mortgagors of in-person meetings, further simplifying processes and
avoiding confusion on the mortgagor's part as to how to obtain mortgage
assistance.
HUD Response: HUD appreciates the comments and agrees that it is
important to retain the required meeting between mortgagors in default
and mortgagees as an important step in helping mortgagors resolve their
default and to avoid foreclosure. HUD appreciates the recommendations
and will take these comments into consideration in developing
implementation policy regarding specific guidance on how and when
mortgagees must attempt to arrange and conduct the mandatory meeting.
HUD should make clear that the requirements in 24 CFR 203.604 are
in addition to those of the Real Estate Settlement Procedures Act's
early intervention requirements and clarify that Sec. 203.604 does not
apply where compliance with the rule would otherwise conflict with the
law.
One commenter stated that HUD should clarify that the regulation
does not apply where compliance would conflict with the law.
Specifically, the commenter stated that HUD should not require a
mortgage servicer to engage with a mortgagor in instances where a
mortgage servicer has received a cease-and-desist order or a mortgagor
has received a discharge through Chapter 7 bankruptcy, as required by
the Fair Debt Collection Practices Act. The commenter suggested that
this exemption could be included in the regulation by adding ``unless
otherwise prohibited by law'' as an exemption in the rule.
Another commenter stated that HUD should make clear that Sec.
203.604 sets out requirements that are in addition to those in 12 CFR
part 1024 for the Real Estate Settlement Procedures Act (RESPA)
requirements, otherwise referred to as Regulation X. The commenter
stated that Regulation X directs mortgage servicers to contact
mortgagors at an early stage of default and give them certain limited
information, including basic information about loss mitigation and
mortgage servicer contacts. The commenter stated that Regulation X
allows mortgage servicers to combine the content of the early
intervention notice with the text of other notices the mortgage
servicer delivers to satisfy a different legal requirement. The
commenter stated that a mortgage servicer providing the minimum early
intervention notice required under Regulation X does not comply with
the requirements under 24 CFR 203.604 but that some mortgage servicers
may mistakenly believe they have met the requirements under 24 CFR
203.604 by only providing the minimum notice required under the
Regulation X early intervention requirements.
The commenter expanded on why the Regulation X early intervention
notice does not comply with the requirements of Sec. 203.604, stating
that the Regulation X notice does not require the mortgagee to inform
the mortgagor of the availability of the specific FHA loss mitigation
options or provide a description of the options. The commenter also
stated that the basic Regulation X notice does not inform the mortgagor
about the benefits of the meeting available under Sec. 203.604.
HUD Response: HUD appreciates the recommendations and will take
these comments into consideration in developing implementation policy,
including specific guidance on complying with 24 CFR 203.604 and other
regulatory and statutory requirements. A mortgagee's responsibilities
under this updated regulation do not replace or supersede the
requirement to fulfill their obligations under other applicable
Federal, State, and local laws.
HUD should reimburse mortgage servicers for the cost of in-person
visits.
A commenter who opposed removal of the face-to-face requirement
stated that the implementation of a direct reimbursement incentive from
HUD to mortgage servicers for the costs of the face-to-face contact
would likely ease the cost concerns of mortgage servicers. Another
commenter supported the removal of the face-to-face requirement but
suggested HUD reimburse expenses if the mortgagee chooses to attempt an
in-person, face-to-face meeting with the mortgagor. A different
commenter suggested that the rule should be revised so that FHA
requires and pays for a visit to the mortgaged property if the
mortgagor has been unresponsive to two remote contact attempts.
HUD Response: HUD appreciates the commenters' suggestions. Helping
mortgagors in default to avoid foreclosure is in the shared best
interest of the mortgagor, the mortgagee, and HUD. HUD policy outlines
specific outreach requirements to mortgagors in default, which is
included in the cost of servicing. Currently, HUD provides incentives
to mortgagees when certain loss mitigation actions are completed to
offset the cost to service mortgages in default.
HUD should update the HUD-2008-5-FHA form.
One commenter recommended that HUD update form HUD-2008-5-FHA
``Save Your Home: Tips to Avoid Foreclosure'' to include the expanded
methods of permitted communication.
HUD Response: HUD appreciates the commenter's recommendations. HUD
will review form HUD-2008-5-FHA, Save Your Home: Tips to Avoid
Foreclosure, and will make revisions, as needed.
HUD should use the Single Family Drafting Table prior to finalizing
the rule.
A commenter stated that FHA should utilize the Single Family
Drafting Table to receive comments before finalizing policy updates to
the FHA Single Family Housing Policy Handbook 4000.1 and that this
should be completed before the implementation date of the policy. The
commenter stated that the Single Family Drafting Table is important to
use in this situation because it is very difficult to fully appreciate
the operational impacts and implementation challenges raised by the
proposed rule as key elements are currently undefined. The commenter
stated that mortgage servicers should have the opportunity to evaluate
an appropriate implementation deadline to adjust the operations before
the required effective date.
[[Page 63092]]
HUD Response: HUD appreciates the commenter's request to utilize
the Single Family Drafting Table and will take this suggestion into
consideration in developing implementation policy related to this rule.
D. Data Cited in the Proposed Rule
HUD should not rely upon the MBA-provided data cited in the
proposed rule.
Multiple commenters stated that HUD should not rely on the mortgage
servicers' data provided by the MBA that is cited in the proposed rule
(``MBA-provided data'') because the data is flawed regarding homeowner
participation in face-to-face meetings. One commenter stated that the
cited data should not be relied upon either in this rulemaking or when
HUD revises the FHA Single Family Housing Policy Handbook 4000.1 to add
guidelines for the conduct of the mandatory meetings.
Another commenter suggested that, to get appropriate data,
homeowners should be asked about face-to-face meetings. The commenter
believed a significant majority of homeowners would report that no
mortgage servicer contacted them to offer a face-to-face meeting
consistent with the requirements in 24 CFR 203.604.
One commenter stated that the statistical references to MBA-
provided data regarding the low in-person, face-to-face ``interview
acceptance rate'' used by HUD to support the proposed changes is
concerning and that MBA's data paints an incomplete picture. The
commenter stated that this MBA-provided data overlooks the most
important value-add of the in-person, face-to-face requirement--the in-
person visit to the property increases mortgagor response. The
commenter stated that, after in-person, face-to-face contact is made, a
mortgagor will generally digest the information presented by the
mortgage servicer and then contact the mortgage servicer or submit a
request for mortgage assistance. The commenter stated that the MBA-
provided data does not account for the statistics regarding QRPC, loan
workouts initiated, or payments made after the in-person, face-to-face
visit to the mortgagor's home. The commenter further stated that the
MBA-provided data presents only partial data from three mortgage
servicers, noting that there are hundreds of mortgage servicers that
service FHA-insured mortgages. The commenter stated that many mortgage
servicers realize the value of operating an in-person, face-to-face
contact program.
Multiple commenters disagreed with the suggestion in the data HUD
cited in the proposed rule that mortgagors are not interested in having
a meeting with their mortgage servicers. The commenters stated that the
data does not account for the frequency by which mortgage servicers do
not comply with the current version of Sec. 203.604. In support of the
statements, the commenters cited information from the National Consumer
Law Center, Home Foreclosures at 6.2 (2d ed. 2023), available at
https://library.nclc.org/, and the HUD Office of Inspector General's
(OIG) report, Servicers Generally Did Not Meet HUD Requirements When
Providing Loss Mitigation Assistance to Borrowers With Delinquent FHA-
Insured Loans, 2023-KC-0005 (June 13, 2023). The commenters said that
when mortgage servicers have complied with the requirements, the
mortgage servicer's actions often meet the letter, but not the spirit,
of the regulation and do not facilitate engagement with mortgagors.
One commenter stated that the data relied upon by HUD in the
proposed rule does not necessarily mean that mortgagors do not want in-
person meetings or that mortgagors would not take advantage of the
option to have the mandatory meeting being in person if the rule were
properly enforced. The commenter stated that HUD's conclusion in the
proposed rule that ``mortgagors are demonstrating their preference for
interacting with mortgagees through technology'' is speculative. The
commenter stated that data shows that mortgagors in default want to
interact with their mortgage servicers, including through face-to-face
meetings, and that these face-to-face interactions produce favorable
outcomes for many mortgagors, as well as for investors in mortgage
loans.
The commenter went on to state that another reason HUD should not
rely on the mortgage servicer data on mortgagor engagement with the
face-to-face meeting in this rulemaking or subsequent development of
guidance is that HUD appears to have assumed that the mortgage
servicers providing the data have properly complied with the face-to-
face meeting regulation. The commenter stated that this assumption is
not warranted given ``significant and persistent evidence of mortgage
servicer non-compliance with HUD loss mitigation guidelines, including
the face-to-face meeting rule.'' The commenter stated that the data
describing limited uptake of meetings in the current proposed rule
leaves questions unanswered. The commenter said that it is not clear
that a different way of offering meetings, through technology, on its
own, would yield significantly different results. The commenter stated
that truly engaging with mortgagors and providing essential information
about loss mitigation also has a profound effect on mortgagor outcomes.
The commenter stated that it is disappointed by HUD's apparent
acceptance that the meetings did not take place because the current
rule relies on outdated ``technology'' and that it is concerned by
HUD's apparent lack of scrutiny of mortgage servicers' claims regarding
past non-participation in the meetings. The commenter stated that
according to the MBA-provided data, mortgagors simply did not want to
participate in ``face-to-face'' meetings; however, the commenter stated
that it is not aware of efforts to ask the mortgagors why they did not
participate in Sec. 203.604 meetings.
HUD Response: HUD appreciates the comments and shares the
commenter's concerns about helping mortgagors in default to resolve
their delinquency to avoid foreclosure. HUD prioritizes mortgagor
outcomes and safeguarding the MMIF in all regulatory and policy
decisions impacting FHA Single Family mortgages. HUD agrees with the
commenter that these decisions should not be based solely on the
perspective of any one industry partner or industry group.
HUD has taken into consideration the comments provided by all
stakeholders. When considering information provided through comments,
HUD is focused on the most relevant data that directly relates to the
servicing of FHA mortgages currently subject to HUD's requirements.
HUD also notes that information provided by commenters regarding
foreclosure-prevention mediation programs discuss efforts that assist
mortgagors at a much later stage in the foreclosure process and involve
consumer advocates and the court system, unlike the meeting required
through this rule. The commenters' comparisons of mortgagors in
distinctly different scenarios may not adequately consider these
specific and important differences.
As stated in the subsection titled ``Benefits of the face-to-face
meeting and limits of remote communication methods'' of this final
rule, HUD believes that by expanding the methods mortgagees may use to
schedule and conduct the meeting, more mortgagors will participate in
the meeting with the mortgagee.
[[Page 63093]]
E. Responses to HUD's Specific Request for Comment in the Proposed Rule
What should constitute a ``reasonable effort'' and a ``verifiable
attempt'' for the purposes of 24 CFR 203.604?
A commenter urged HUD to be as expansive as possible when defining
``reasonable effort'' and ``verifiable attempt.'' The commenter stated
that any communication that offers homeowners the opportunity either to
meet in person or connect with the mortgagee via the to-be-defined-by-
HUD acceptable electronic means should be considered as evidence that a
mortgagee made a ``reasonable effort'' to contact the homeowner. The
commenter stated that a ``verifiable attempt'' should be any record of
an action taken to reach a defaulted mortgagor who is noted in the
mortgagee's business records, including any notes made by the
mortgagee's representative to the mortgagor file.
Another commenter agreed with HUD's proposed rule that two
verifiable attempts to meet is ``reasonable'' and stated that these
attempts to meet should be documented. A commenter stated that a
``reasonable effort'' would entail an effort to meet before three full
monthly installments are due and at least 30 days before foreclosure is
commenced. The commenter stated that these efforts should be reflected
in the mortgagee's files as evidence of meeting HUD's requirements.
One commenter stated that a ``reasonable effort'' should be defined
as two verifiable attempts by the mortgage servicer to establish
contact with a delinquent mortgagor as required under the FHA Single
Family Housing Policy Handbook 4000.1, III.A.2.h.vi (Contact Efforts
with Delinquent Borrowers). The commenter also stated that ``verifiable
attempt'' should be defined as the required note in the servicing file
documenting compliance with FHA Single Family Housing Policy Handbook
4000.1, III.A.2.h.vi (Contact Efforts with Delinquent Borrowers).
HUD Response: HUD appreciates the comments and agrees that it is
important to continue requiring the mortgagee to make at least two
verifiable attempts to conduct this meeting with mortgagors in default
and to document these efforts. Further, HUD appreciates the commenter's
suggestion that HUD allow mortgagees to utilize a broad range of
communication methods to reach mortgagors. HUD is taking these comments
into consideration in developing policy regarding how and when
mortgagees must attempt to arrange the meeting.
F. Mortgagee Compliance With 24 CFR 203.604
Mortgagee noncompliance with mandatory meeting rule.
One commenter stated that oversight from HUD OIG has shown
consistent problems with mortgage servicer compliance with HUD
regulations and mortgage servicer reporting of their own compliance to
HUD. Citing a HUD OIG October 2016 report entitled ``Single-Family
Mortgage Insurance Claims'' (2017-KC-0001), the commenter stated that
HUD OIG reviewed a sample of FHA insurance claims paid out over a five-
year period. The commenter stated they were particularly concerned
about HUD OIG's finding regarding the frequency with which mortgage
servicers misrepresented their actions when filing insurance claims
with HUD. As stated by the commenter, according to HUD OIG's survey
sample, mortgage servicers in approximately 45 percent of cases failed
to reduce their claim amounts due to their noncompliance with HUD
guidelines when they should have reduced those claim amounts. Instead,
as stated by the commenter, the mortgage servicers asked for and
received full insurance claims as if they had complied with the
guidelines.
Citing a HUD OIG September 2017 report entitled ``HUD Did Not Have
Adequate Controls to Ensure that Servicers Properly Engaged in Loss
Mitigation'' (2017-LA-0004), the commenter stated that HUD OIG found
that mortgage servicers frequently failed to properly engage in loss
mitigation and that HUD failed to meet its oversight obligations. The
commenter stated that the report found almost 30% of claims that HUD
OIG reviewed had ``significant servicing deficiencies.'' The commenter
stated that specifically, with respect to the face-to-face meeting
rule, the audit found that in 17 percent of cases, ``there was no
attempt for a face-to-face interview with delinquent borrowers or it
was not attempted within the required timeframe. Regulations at 24 CFR
203.604(b) require servicers to attempt the interview before three
unpaid payments.''
The commenter stated that significant issues with mortgage servicer
compliance with HUD requirements have continued. Citing additional
reports issued by HUD OIG, commenters stated that HUD OIG found that
mortgage servicers persistently failed to comply with the FHA loss
mitigation waterfall. A commenter stated that in a June 13, 2023,
report, entitled ``Servicers Generally Did Not Meet HUD Requirements
when Providing Loss Mitigation Assistance to Borrowers with Delinquent
FHA-Insured Loans'' (2023-KC-0005), HUD OIG found that ``nearly half of
the borrowers did not receive the correct loss mitigation assistance.''
The commenter stated that while this report focuses on specific loss
mitigation options and not outreach requirements such as the mandatory
meeting rule, there is no reason to believe that servicers are better
at complying with the face-to-face meeting rule than the waterfall
provisions. The commenter stated that, based on the findings in the HUD
OIG June 2023 report, expanded access to mandatory meetings will
improve compliance with HUD requirements if offered in earnest by
trained mortgage servicer staff. The commenter stated that, instead,
the report suggests continued problems with FHA servicing as outlined
in HUD OIG's 2016 and 2017 reports and calls into question HUD's
reliance on mortgage servicer data on compliance. Commenters stated
that they believe that if HUD implements the proposed rule without
effective oversight, it will have the same failed impact as the old
rule.
One commenter stated that case law regarding FHA-insured
foreclosures further confirms mortgage servicer resistance to comply
with the mandatory meeting rule. The commenter, citing court decisions
from Florida, Indiana, Massachusetts, New York, Ohio, and U.S. Federal
court, stated that judicial decisions show mortgage servicers failed to
provide notice by certified mail, ignored the obligation to visit the
home to arrange a meeting, sought to use mediation or some other event
as a substitute for a meeting, failed to keep proper records of what
they are doing, and simply took no action to properly arrange a
mandatory meeting when they are required to do so. The commenter stated
that while these cases involve individual mortgagors, HUD should assume
that servicing failures are not anomalous. The commenter stated that,
moreover, these cases are illustrative in light of the HUD OIG reports
over a period of years that show mortgage servicers failing to comply
with the mandatory meeting rule. The commenter stated that given all of
this, HUD simply should not rely on mortgage servicer data in making
policy decisions.
A commenter described that mortgagors have contacted HUD to report
mortgagees not complying with Sec. 203.604 and that HUD would not
assist the homeowners. The commenter said that, except for in a few
States, courts have not required mortgagees to comply with HUD's
regulations,
[[Page 63094]]
including Sec. 203.604, when taking a foreclosure action, even though
HUD's regulations are incorporated by reference into notes and
mortgages. The commenter stated that the reason State courts have not
required mortgagee compliance with Sec. 203.604 is because the courts
were waiting to receive guidance from HUD but HUD never provided that
guidance.
HUD Response: HUD appreciates the comments and agrees that
compliance with this requirement is important in helping mortgagors
resolve the default to avoid foreclosure. Further, HUD agrees that the
need to comply with the requirements in 24 CFR 203.604 exists,
regardless of the communication methods used to reach and conduct the
meeting with the mortgagor. HUD is reviewing compliance oversight of
this required meeting and is taking these comments into consideration.
HUD appreciates the commenters' information regarding various court
cases involving FHA-insured mortgages. While HUD will continue to
monitor the trends in foreclosure cases throughout the Nation, HUD
cannot comment on the individual cases referenced by the commenter in
this rulemaking. HUD similarly appreciates the commenter's concerns
about mortgagor reporting of mortgagee non-compliance with HUD
requirements. HUD encourages mortgagors who are experiencing issues
with resolving the delinquency or scheduling this meeting with their
mortgagee to call 1-800-CALL-FHA (1-800-225-5342).
HUD notes that the October 2016 HUD OIG audit ``Single-Family
Mortgage Insurance Claims'' (2017-KC-0001) cited does not specifically
address mortgagee compliance with the in-person requirement.
Recommendations for HUD monitoring of mortgagee compliance with 24
CFR 203.604.
Commenters stated that HUD should require mortgage servicers to
develop a written plan that describes the concrete steps it has taken
to implement the meeting requirement and that this plan must be
integrated in HUD's quality control. A commenter stated that a concrete
plan for conducting meetings is key to accountability and oversight.
The commenter stated that the absence of such a plan is a clear
indication that the mortgage servicer does not take the meeting
requirement seriously. The commenter stated that elements of a plan
must include: (1) the allocation of designated staff to handle the
meetings; (2) provision for training and supervision of the designated
staff to process mortgagor requests and conduct meetings; (3)
description of the content of notices to mortgagors; (4) the protocol
for conduct of meetings; (5) documentation of the application of the
FHA loss mitigation waterfall at the meeting; (6) a document
summarizing the outcome of a meeting for mortgage servicer records and
that is provided to the mortgagor; and (7) a protocol for reporting
data to HUD on numbers of meetings and outcomes.
The commenter stated that HUD should give its mortgage servicers a
fixed deadline to submit the plan to HUD. The commenter stated that
each FHA mortgage servicer's plan should be available to the public
through the mortgage servicer and HUD's website. The commenter stated
that HUD should provide model notice forms and model plans to minimize
burden on mortgage servicers.
The commenter went on to state that mortgage servicers must be
required to report regularly on the status of their meetings, with data
on numbers of mortgagors eligible, participation rates, and outcomes.
The commenter stated that HUD must actively investigate patterns of
failure to conduct meetings and determine causes of non-participation.
The commenter stated that mortgage servicers that report low
participation must develop plans to improve their practices so that
rates improve. The commenter stated that among other data points, HUD's
Neighborhood Watch system should be adjusted to include data on each
mortgage servicer's conduct of meetings.
Commenters stated that information on the lack of mortgagor
engagement under the current meeting rule was available to HUD for
years. The commenters stated that if HUD had timely investigated to
find the cause of the systemic issues, HUD could have demanded remedial
actions from the mortgage servicers and followed up with appropriate
oversight, but this never happened.
One commenter stated that while it appreciates HUD's
acknowledgement of the important function that these meetings perform,
the commenter has concerns about how a modified rule would be
implemented. The commenter stated that this concern stems from HUD's
long-standing failure to ensure that mortgage servicers implement the
existing rule. The commenter stated that when there is accountability
and oversight, as in certain State and local programs, meetings between
mortgagors and mortgage servicers take place with a robust frequency
and produce good results. The commenter stated that meetings are not
difficult to arrange when mortgage servicers act intentionally to
facilitate them.
HUD Response: HUD appreciates the comments and agrees that
compliance with this requirement is important in helping mortgagors
resolve mortgage defaults to avoid foreclosure. Further, HUD agrees
that the need to comply with the meeting requirements exists regardless
of the communication methods used for outreach and conducting the
meeting with the mortgagor. HUD is reviewing compliance oversight of
this required meeting and is taking these comments into consideration
in developing policy regarding how and when mortgagees must attempt to
arrange and conduct this meeting.
G. Keys to Meaningful Engagement With the Mortgagor
Commenters stated they recognized that if the removal of the 200-
mile exemption is finalized, not every mandatory meeting under Sec.
203.604 could be in person; however, commenters stated that HUD must
take steps to ensure that the meeting with the mortgagor is meaningful.
A commenter suggested that ``FHA keep front of mind the keys to
engagement'' with a mortgagor: (1) making quality contact with a
mortgagor who is experiencing hardship; and (2) providing the mortgagor
with an understanding of their options to address their mortgage
delinquency.
HUD Response: HUD appreciates the comments and agrees that it is
important to retain a meaningful meeting requirement between mortgagors
in default and mortgagees. HUD believes that by expanding this meeting
to all mortgagors in default, the options for outreach, and the methods
for conducting the meeting will improve mortgagor's access to
participate in a meeting, leading to more resolved defaults and fewer
foreclosures. HUD appreciates the recommendations and will take these
comments into consideration in developing policy regarding how and when
mortgagees must attempt to arrange and conduct the mandatory meeting
and the information that must be provided to the mortgagor.
H. Value of the Mandatory Meeting Regardless of Whether the Meeting Is
In-Person or Held Remotely
One commenter stated that they agree with HUD's characterization of
the goal of the Sec. 203.604 meeting. Commenters stated that the
meeting provides particular value for FHA-insured mortgagors and for
the MMIF. Commenters stated that because HUD has developed its own loss
mitigation waterfall with concepts like a partial claim, the meeting
facilitates better
[[Page 63095]]
mortgagor understanding of the assistance options available. Commenters
said that where a full submission of documents is not required before
providing relief, the meeting is even more valuable because the
mortgagor and mortgage servicer can work together to identify a loss
mitigation option during the meeting.
One commenter stated that the mandatory meeting facilitates
effective communication that is necessary due to the nuanced and unique
nature of FHA's loss mitigation system. The commenter stated that
having the meeting scheduled in advance gives the mortgagor and the
mortgage servicing representative the chance to prepare. The commenter
stated that the mandatory meeting provides a specific opportunity for
mortgagors to seek clarity and a path forward to stability.
Another commenter stated that revisions to 24 CFR 203.604 should
maximize the potential for mortgagees to engage with distressed
mortgagors about loan rehabilitation and home retention to ensure that
FHA responsibly manages its mortgage guarantee program for mortgagors
and the MMIF for U.S. taxpayers.
HUD Response: HUD appreciates the comments and agrees that it is
important to retain the value of the required meeting between
mortgagors in default and mortgagees. HUD appreciates the
recommendations and will take these comments into consideration in
developing policy regarding how and when mortgagees must attempt to
arrange and conduct the mandatory meeting and the information that must
be provided to the mortgagor.
I. Mandatory Meeting Helps HUD Satisfy Its Multiple Statutory
Obligations
One commenter stated that the mandatory meeting helps HUD satisfy
its multiple statutory obligations to stabilize homeownership for low-
to moderate-income mortgagors and mortgagors of color. The commenter
stated that, for the FHA-insured loan program at issue in this proposed
rule, the National Housing Act requires that FHA must make decisions
``to meet the housing needs of the borrowers that the single family
mortgage insurance program under this subchapter is designed to
serve.'' The commenter further stated that in its design of programs,
including loss mitigation programs, HUD has the obligation to
affirmatively further fair housing. The commenter stated that, under 42
U.S.C. 3608(e)(5), HUD must ``administer the programs and activities
relating to housing and urban development in a manner affirmatively to
further the policies of the Fair Housing Act.'' The commenter stated
that this obligation for HUD is particularly relevant to FHA's insured
loan program because Black and Latino mortgagors rely heavily on it to
purchase homes. The commenter stated that these statutory obligations
require HUD to take into account the needs of their specific mortgagors
and design systems to promote their mortgagors' success. The commenter
stated that the mandatory meeting facilitates HUD's statutory goals
because they improve outcomes for low- to moderate-income mortgagors.
HUD Response: HUD appreciates the comments and agrees that it is
important for mortgagors in default to meet with their mortgagees to
resolve their mortgage default and to avoid foreclosure. HUD's goal is
for mortgagors in default to have this opportunity to learn about loss
mitigation options that may help them prevent foreclosure and retain
their homes.
HUD's commitment to low-to-moderate income mortgagors, first-time
mortgagors, and underserved and minority mortgagors extends to
considering how best to reach these mortgagors after a default. By
expanding the options for mortgagor outreach and the methods for
conducting the meeting, HUD believes that other permissible forms of
communications will best assist the mortgagors that FHA is designed to
serve.
J. Mortgage Servicers Must Accommodate Mortgagors With Disabilities and
Mortgagors With Limited English Proficiency
Mortgage servicers must accommodate the needs of mortgagors with
disabilities.
One commenter stated that mortgage servicers should pay special
attention to the needs of mortgagors with disabilities. The commenter
stated that mortgagors with a disability should be informed whether an
assistive device or other reasonable accommodation will be provided at
the meeting with the mortgage servicer. The commenter, citing
information from the Centers for Disease Control and Prevention, stated
that over one quarter of adults in the United States have a disability
and the percentage of people living with disabilities increased during
the pandemic.
The commenter, citing provisions within the FHA Single Family
Housing Policy Handbook 4000.1, further stated that mortgage servicers
are required to comply with the Fair Housing Act and provide meaningful
access to face-to-face meetings for people with disabilities. The
commenter stated that this includes providing communication technology
or devices to ease access to the meetings for the visually impaired,
Deaf, and hard-of-hearing communities, including an onsite interpreter
if necessary. The commenter stated that the Department should work with
mortgage servicers to ensure that template notices of the meeting are
provided in plain-language formats to make the information accessible
to people with intellectual and developmental disabilities. The
commenter also stated that mortgage servicers should be required to ask
mortgagors whether they have communication disabilities and record
their needed auxiliary aid or service in the file so that mortgagors
consistently receive effective communication from the mortgage
servicer.
The commenter went on to state that to improve accessibility, HUD
should also continue to refer mortgagors to available HUD-approved
housing counselors in all communications. The commenter stated that
many mortgagors will be more comfortable and better able to understand
and access their options when they have the assistance of housing
counselors during the meetings, whether they are conducted in person,
through videoconferencing, or over the phone. The commenter stated that
HUD should promote the use of housing counseling and ensure that for
homeowners who need in-person interaction, the housing counseling
agency can meet with the homeowner in-person and help to coordinate the
internet or phone call with the mortgage servicer.
HUD Response: HUD appreciates the commenter's suggestions and
shares the commenter's concerns about mortgagors with disabilities. HUD
agrees that housing counseling serves as a valuable resource for
mortgagors in default. HUD's existing policy in the FHA Single Family
Housing Policy Handbook 4000.1 requires that mortgagees accommodate
mortgagors with disabilities, including providing assistive technology
or sign language interpreters, if requested by the mortgagor. In
addition, the FHA Single Family Housing Policy Handbook 4000.1 requires
that mortgagees provide all mortgagors in default with information on
the HUD Housing Counseling services available. This rule also does not
prohibit face-to-face meetings, and FHA participating lenders must be
prepared to offer other methods to meet the different communication
needs of their borrowers and prevent discriminatory effects.
[[Page 63096]]
In addition, HUD believes that expanding this meeting to all
mortgagors in default, the outreach methods, and the means of
conducting the meeting will help more mortgagors resolve their mortgage
default and avoid foreclosure, including mortgagors with disabilities.
This rule does not prohibit face-to-face meetings and reminds FHA
participating lenders to meet different communications needs of their
borrowers and prevent discriminatory adverse effects.
Mortgage servicers must accommodate the needs of mortgagors with
limited English proficiency.
One commenter stated that in developing guidance on the mandatory
meeting requirement, it is absolutely crucial that mortgage servicers
accommodate mortgagors with limited English proficiency (LEP),
especially when the mortgage servicer communicates with mortgagors in
default about their right to a meeting under Sec. 203.604. The
commenter, citing information from the U.S. Census Bureau, stated that
LEP individuals collectively comprise roughly one in twelve Americans,
nearly two thirds of whom speak Spanish. The commenter, citing
information from the CFPB and the Federal Housing Finance Agency,
stated that the challenges that LEP mortgagors face in the mortgage
market have been well studied, and that the findings are all
unanimous--LEP mortgagors face barriers both understanding the terms of
their mortgage loans and in resolving problems when they face hardship.
The commenter stated that an opportunity to meet directly with
trained mortgagee staff could make an enormous difference for an LEP
mortgagor struggling to understand their options. The commenter stated
that it is important that LEP individuals have a meaningful chance to
learn that they have this right and that they get the most out of these
meetings once they take place. The commenter stated that this is
especially relevant given HUD's obligation to affirmatively further
fair housing.
The commenter stated that according to the FHA Single Family
Housing Policy Handbook 4000.1, mortgage servicers already must take
reasonable steps to provide meaningful access to persons with LEP, such
as providing oral interpretation or written translation of vital
documents. The commenter stated that while this requirement is clear,
English-only written communications remains the industry standard for
speaking to advocates representing homeowners in foreclosure. The
commenter stated that this reality is troubling but not surprising. The
commenter further stated that apart from this general mandate to
provide meaningful access, there is little detail around how mortgage
servicers can meet these obligations and, perhaps most importantly,
what mortgage servicer conduct constitutes a failure to meet these
obligations.
The commenter recommended that HUD unambiguously impose language
access requirements to the most vital communications between mortgagors
and mortgage servicers, beginning with notice of the opportunity to
meet directly with mortgage servicer staff under Sec. 203.604. The
commenter recommended that HUD implement this requirement in two steps.
First, the commenter stated that notices of this right to a meeting
should always be bilingual, in both English and Spanish, to enable
mortgage servicers to reach the largest proportion of LEP mortgagors.
The commenter stated that at a minimum, mandatory, yet brief, Spanish
language disclosures should be added to predominantly English language
notices explaining that mortgagors have a right to meet with ``trained
mortgagee staff'' to discuss loss mitigation and that mortgagors may
request an interpreter for the meeting at no cost to the mortgagor. The
commenter stated that these brief tagline disclosures could also be
provided at the bottom of English language notices in a range of
languages to reach a larger proportion of LEP mortgagors. Second, the
commenter stated that HUD should require mortgage servicers to provide
a translated notice whenever the mortgage servicer is both aware of a
consumer's language preference and if HUD has provided a model
translated notice in that language. The commenter stated that this will
ensure that the mandate reaches a broader proportion of language
groups. The commenter stated that to accompany these requirements, HUD
should publish a model bilingual notice, model tagline disclosures in a
range of languages, and additional fully translated notices in at least
the top five most commonly spoken languages among U.S. individuals with
LEP: Spanish, Chinese, Vietnamese, Korean, and Tagalog.
The commenter also stated that it is absolutely essential that
mortgagors with LEP or other language barriers be able to fully
participate in these meetings when they take place. The commenter
stated that to this end, HUD should clarify that mortgage servicers
must provide language services for these meetings without delay and
without any cost to these mortgagors. The commenter stated that the
language of the mandate in the FHA Single Family Housing Policy
Handbook 4000.1 to provide meaningful language access is nearly
identical to the mandate to provide meaningful language access under
Executive Order 13166, Improving Access to Services for Persons with
Limited English Proficiency, and the implementing HUD guidance entitled
``Final Guidance to Federal Financial Assistance Recipients Regarding
Title VI Prohibition Against National Origin Discrimination Affecting
Limited English Proficient Persons'' (72 FR 2732, Jan. 22, 2007). Thus,
the commenter stated that HUD's LEP guidance to recipients of Federal
financial assistance through the LEP Toolkit, including HUD-approved
housing counseling agencies, may be instructive. The commenter stated
that while the HUD guidance offers narrow safe harbors when it comes to
providing written assistance to individuals with LEP, these exceptions
do not exist for oral interpretation. Thus, the commenter stated that
all entities subject to the HUD guidance should provide oral
interpretation to all LEP individuals who would benefit from language
assistance. The commenter recommended that HUD implement a similar
standard for the meeting requirement under Sec. 203.604. The commenter
stated that in addition, HUD should provide more detailed guidance on
acceptable interpreter qualifications, when to use telephonic, virtual,
or in-person interpretation services, and expressly prohibit the use of
ad hoc interpreters, which the commenter defined as self-reported
bilingual persons who lack formal training, provided by the mortgagor
as a substitute for qualified interpretation services offered by
mortgage servicers.
Commenters also stated that HUD should require mortgage servicers
to communicate in writing about the required meeting in the mortgagor's
preferred language and to explicitly offer simultaneous language
interpretation at the mortgagor's request, at no additional cost to the
mortgagor. Two commenters stated that HUD should add to its current
regulations by requiring mortgage servicers to collect and maintain
information on mortgagor language preference and provide vital loss
mitigation information in mortgagors' preferred language.
HUD Response: HUD appreciates the comments and shares the
commenters' concerns about providing meaningful language access to
mortgagors with limited English proficiency. HUD agrees that mortgagees
should take reasonable steps to provide meaningful access to
[[Page 63097]]
mortgagors with LEP when the mortgage servicer communicates with
mortgagors in default about their right to a meeting under Sec.
203.604. Existing policy in the FHA Single Family Housing Policy
Handbook 4000.1 requires mortgagees to provide meaningful access to
notices and disclosures when mortgagor communications have been
requested by persons with LEP, including oral interpretation and/or
written translations of vital documents. Furthermore, mortgagees must
provide highlight visible information regarding any availability of
language access services offered by the mortgagee for mortgagors with
LEP, this information must be provided, at a minimum, in Spanish and
must include an advisement to seek translation or other language
assistance. While HUD appreciates the comments regarding LEP
mortgagors, revising requirements related to mortgagees' interactions
with LEP mortgagors are outside of the scope of this rulemaking.
HUD believes that expanding this meeting to all mortgagors in
default, the outreach methods, and the means of conducting the meeting
will help accommodate mortgagors with limited English proficiency to
address their mortgage default and avoid foreclosure.
K. HUD Should Monitor Mortgage Servicer Use of Artificial Intelligence
One commenter stated that given the rise of artificial intelligence
(AI), HUD should specifically require human interactions during the
default process and monitor mortgage servicer use of AI. The commenter,
citing articles entitled ``The Future of Mortgage Lending: How AI and
Humans Can Coexist'' and ``Mr. Cooper is Improving the Home-Buyer
Experience with AI and ML,'' stated that mortgage companies are using
AI throughout the loan process, including in underwriting and
servicing. The commenter, citing an article entitled ``Guaranteed Rate
Deploys Gateless' Smart Underwrite Solution,'' stated that this
technology can automate mechanical tasks including extracting and
validating information from documents to determine whether the
information satisfies an investor or guarantor's guidelines. The
commenter stated that AI systems are used to detect fraud, predict the
risk of default, and analyze data in support of servicing decisions.
The commenter, citing an article entitled ``Big Purple Dot Integrates
with ChatGPT for AI-Powered Customer Support,'' stated that companies
use natural language processing systems, like ChatGPT, to provide
customer service chat features and respond to customer service
requests.
The commenter stated that while streamlining and automating parts
of the loan process can benefit consumers, the servicing of loans in
default demands a human touch and individualized attention. The
commenter stated that mortgagors facing foreclosure are often under
intense financial pressure and need to quickly evaluate and access
complicated loss mitigation options. The commenter stated that
mortgagors need to meet with a human who can assess their financial
situation holistically based on a full view of their situation and
offer workable options. The commenter stated that such individualized
assessments are necessary for sustainable outcomes that will
permanently get mortgagors back on track and avoid foreclosure. The
commenter stated that by funding HUD-approved housing organizations to
provide default and delinquency counseling, the Department shows that
it understands the value of such human/connections.
The commenter stated that given the popularity and availability of
AI systems, mortgage servicers may be tempted to replace human
personnel with AI generated content or chat features for all or a part
of the meeting conducted remotely. The commenter stated that mortgage
servicers may, for example, require that mortgagors interact
extensively with a chat feature at the start of a meeting before
accessing human personnel. The commenter stated that such technological
hurdles can be a barrier to consumers who are anxious and afraid about
losing their home and need the assurance fostered by interaction with a
live person. The commenter, quoting an article entitled ``The Future of
Mortgage Lending: How AI and Humans Can Coexist,'' stated that as one
industry official said, the ``human touch, rapport, trust and empathy
that comes with face-to-face interactions are still considered critical
in the mortgage industry and not fully replicable by AI--ever.''
The commenter further stated that there is currently little
publicly available information on how AI is deployed in the servicing
of defaulted mortgages. The commenter stated that there may be concerns
that AI systems treat similarly situated mortgagors differently in
assessing risk, servicing defaulted loans, or offering loss mitigation
options. The commenter stated that at least one company, Infosys
Mortgage Default Prediction System, in assessing risk of default, uses
data on unemployment rates in the mortgagor's location and job sector.
The commenter stated that use of this data may prove problematic if it
persistently leads to negative outcomes, given well-documented
occupational segregation that puts many workers of color in lower-wage
jobs that are subject to layoffs.
The commenter stated that given the dearth of information, HUD
should require that mortgage companies explain how AI is being deployed
in default servicing, what types of data is collected and how it is
used, and how AI supports default servicing decisions related to loss
mitigation options. The commenter stated that the Department should
ensure that mortgage servicers are abiding by commonly accepted
standards regarding the design, deployment, and testing of these
models, such as the standards outlined in the Blueprint for an AI Bill
of Rights that was published by the White House in October 2022.
HUD Response: HUD appreciates the comments and shares the
commenter's concerns about providing a meaningful meeting between
mortgagors in default and their mortgagees to help resolve a
mortgagor's default and to prevent foreclosure. HUD recognizes that
there are challenges, opportunities, and limitations to emerging
technologies including artificial intelligence. HUD will take these
concerns into consideration in developing guidance regarding how and
when mortgagees must attempt to arrange and conduct this mandatory
meeting.
L. HUD Should Extend the Temporary, Partial Regulatory Waiver of the
Face-to-Face Meeting Requirements in 24 CFR 203.604
A commenter urged HUD to extend the temporary, partial regulatory
waiver of the face-to-face meeting requirements in 24 CFR 203.604,
currently in place, so as to minimize the potential disruption that
would arise if the rule is not finalized before the waiver expires. The
commenter further stated that HUD should align the expiration date of
the waiver with the effective date of any final rule and the applicable
guidance in the FHA Single Family Housing Policy Handbook 4000.1.
Specifically, the commenter recommended that HUD extend the waiver
through calendar year 2024 and then rescind the waiver when the new
rule and guidance are effective. The commenter stated that returning to
requiring in-person meetings, even temporarily, unnecessarily
complicates a mortgage servicer's operations, adds costs, and increases
the risk of noncompliance. The commenter additionally stated that a
return to in-person meetings would inconvenience
[[Page 63098]]
consumers. The commenter, referencing the mortgage servicer data in the
proposed rule, stated that mortgagors accepted in-person meetings less
than 0.1 percent of the time and that avoiding a gap before the new
rule is effective should be a priority of HUD.
HUD Response: HUD appreciates the comments and the commenter's
concerns. On April 4, 2024, HUD further extended the waiver of 24 CFR
203.604 until this final rule becomes effective on January 1, 2025.
Extending the waiver until this final rule becomes effective will allow
for a smoother transition from the waiver to these updated regulatory
requirements and forthcoming policy implementation guidance. This will
limit confusion that could have been caused by removing the waiver
prior to the effective date of the updated regulation and accompanying
policy. It will also remove the burden on industry partners of having
to temporarily resume full compliance the regulation, which would
require significant effort in staffing, contracting, and updating
internal processes and borrower communications for an interim period.
VI. Findings and Certifications
Regulatory Review--Executive Orders 12866, 13563, and 14094
Pursuant to Executive Order 12866 (Regulatory Planning and Review),
a determination must be made whether a regulatory action is significant
and, therefore, subject to review by the Office of Management and
Budget (OMB) in accordance with the requirements of the order.
Executive Order 13563 (Improving Regulations and Regulatory Review)
emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility. The order
also directs executive agencies to analyze regulations that are
``outmoded, ineffective, insufficient, or excessively burdensome, and
to modify, streamline, expand, or repeal them in accordance with what
has been learned.'' Executive Order 13563 further directs that, where
relevant, feasible, and consistent with regulatory objectives, and to
the extent permitted by law, agencies are to identify and consider
regulatory approaches that reduce burdens and maintain flexibility and
freedom of choice for the public. Executive Order 14094 (Modernizing
Regulatory Review) amends section 3(f) of Executive Order 12866, among
other things. As discussed above, this final rule revises HUD's in-
person, face-to-face meeting requirements by permitting mortgagees to
utilize methods of communication most likely to receive a response from
the mortgagor, including remote communication methods to meet with
mortgagors who are in default on their mortgage payments. This rule
also expands the meeting requirement to all mortgagors in default,
including mortgagors who do not reside in the mortgaged property and
those with a mortgaged property not within 200 miles of their
mortgagee. This rule was determined to be not significant under
Executive Orders 12866, 13563, and 14094.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
The updates described in this rule are limited to permitting mortgagees
to communicate with mortgagors who are in default on their mortgage
payments via electronic or other communication methods as determined by
the Secretary rather than in-person. Since mortgagees are already
required to communicate with these mortgagors, this rule only alters
the options for how mortgagees communicate with this population of
mortgagors. If there is an economic impact on mortgagees, it falls
equally on all mortgagees. Further, HUD anticipates that the rule will
have a net positive economic impact on mortgagees by reducing the
expenses associated with making an in-person visit to a mortgagor's
property to comply with the requirements of 24 CFR 203.604.
Environmental Impact
This rule does not direct, provide for assistance or loan and
mortgage insurance for, or otherwise govern or regulate, real property
acquisition, disposition, rehabilitation, alteration, demolition, or
new construction, or establish, revise, or provide for standards for
construction or construction materials, manufactured housing, or
occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is
categorically excluded from environmental review under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (Federalism) prohibits an agency from
publishing any rule that has federalism implications if the rule
either: (i) imposes substantial direct compliance costs on State and
local governments and is not required by statute, or (ii) preempts
State law, unless the agency meets the consultation and funding
requirements of section 6 of the Executive Order. This rule does not
have federalism implications and does not impose substantial direct
compliance costs on State and local governments or preempt State law
within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for Federal agencies to
assess the effects of their regulatory actions on State, local, and
Tribal governments, and on the private sector. This rule does not
impose any Federal mandates on any State, local, or Tribal governments,
or on the private sector, within the meaning of the UMRA.
List of Subjects in 24 CFR Part 203
Hawaiian Natives, Home improvement, Indians--lands, Loan programs--
housing and community development, Mortgage insurance, Reporting and
recordkeeping requirements, Solar energy.
For the reasons stated above, HUD amends 24 CFR part 203 as
follows:
PART 203--SINGLE FAMILY MORTGAGE INSURANCE
0
1. The authority citation for part 203 continues to read as follows:
Authority: 12 U.S.C. 1707, 1709, 1710, 1715b, 1715z-16, 1715u,
and 1715z-21; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).
0
2. Revise Sec. 203.604 to read as follows:
Sec. 203.604 Contact with the mortgagor.
(a) For mortgages insured pursuant to this part, except those
mortgages insured on Indian Land pursuant to section 248 of the
National Housing Act:
(1) The mortgagee must conduct a meeting with the mortgagor, or
make a reasonable effort to arrange such a meeting, before three full
monthly installments due on the mortgage are unpaid and at least 30
days before foreclosure is commenced, or at least 30 days before
assignment is requested if the mortgage is insured on Hawaiian
homelands pursuant to section 247 of the National Housing Act. The
meeting with the mortgagor must be conducted in a manner as determined
by the Secretary.
(i) If default occurs on a repayment plan, the mortgagee must
conduct a meeting with the mortgagor, or make a reasonable effort to
arrange such a
[[Page 63099]]
meeting, no later than 30 days after such default.
(ii) [Reserved]
(2) A meeting with the mortgagor is not required if:
(i) The mortgagor has clearly indicated that they will not
cooperate in the meeting;
(ii) The mortgagor is on a repayment plan to bring the mortgage
current, and the mortgagor is meeting the terms of the repayment plan;
or
(iii) A reasonable effort to arrange a meeting with the mortgagor
is unsuccessful.
(3) 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.
(b) For mortgages insured on Indian Land pursuant to section 248 of
the National Housing Act:
(1) The mortgagee must conduct a face-to-face meeting with the
mortgagor, or make a reasonable effort to arrange such a meeting,
before three full monthly installments due on the mortgage are unpaid
and at least 30 days before assignment is requested.
(i) If default occurs on a repayment plan arranged other than
during a face-to-face meeting, the mortgagee must have a face-to-face
meeting with the mortgagor, or make a reasonable effort to arrange such
a meeting, within 30 days after default or at least 30 days before
assignment is requested.
(ii) [Reserved]
(2) A face-to-face meeting is not required if:
(i) The mortgagor has clearly indicated that they will not
cooperate in the meeting;
(ii) The mortgagor is on a repayment plan to bring the mortgage
current, and the mortgagor is meeting the terms of the repayment plan;
or
(iii) A reasonable effort to arrange a meeting with the mortgagor
is unsuccessful.
(3) A reasonable effort to arrange a face-to-face meeting with the
mortgagor shall include at a minimum, one letter sent to the mortgagor
certified by the Postal Service as having been dispatched and at least
one trip to see the mortgagor at the mortgaged property. In addition,
the mortgagee must document that it has made at least one telephone
call to the mortgagor for the purpose of trying to arrange a face-to-
face meeting. The mortgagee may appoint an agent to perform its
responsibilities under paragraph (b) of this section.
(4) The mortgagee must also:
(i) Inform the mortgagor that HUD will make information regarding
the status and payment history of the mortgagor's loan available to
credit bureaus and prospective creditors;
(ii) Inform the mortgagor of other available assistance, if any;
and
(iii) Inform the mortgagor of the names and addresses of HUD
officials to whom further communications may be addressed.
Julia R. Gordon,
Assistant Secretary for Housing, Federal Housing Commissioner.
[FR Doc. 2024-16728 Filed 8-1-24; 8:45 am]
BILLING CODE 4210-67-P