by Lisa Lee, Esq.

KML Law Group, PC

USFN Member (PA, NJ)

In April, USFN published an article titled “Will HUD Face-to-Face Meeting Waivers Become Permanent?” A link to that prior article is here: https://www.usfn.org/blogpost/1296766/488160/Will-HUD-Face-to-Face-Meeting-Waivers-Become-Permanent

Now it seems that open question is one major step closer to reality.

On Monday, July 31, 2023, FHA published a proposed rule in the Federal Register titled “Modernization of Engagement with Mortgagors in Default.” The rule is open for public comment through September 29, 2023, and the Federal Register docket reference is Docket No. FR-6353-P-01.

The proposed rule, if it is adopted, would allow servicers to utilize electronic and other remote communication tools, among other things, to conduct interviews to satisfy the early intervention requirements, and would eliminate the current requirement (that is currently subject to a formal waiver due to COVID) that mortgagees make at least one trip to the mortgaged property to schedule a face-to-face meeting with the borrower. Of course, elimination of the face-to-face meeting requirement has a quid pro quo. The proposed rule would expand the requirement to include all borrowers, rather than just those who reside in the mortgaged property and/or whose properties are within 200 miles of their mortgagee, its servicer, or a branch office.

Industry stakeholders are encouraged to read the entire proposed rule and to submit comments following the methods outlined in the Federal Register. The comment period closes on September 29, 2023. Read the proposed rule as published in the Federal Register here.

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USFNews - August 9