The Department of Housing and Urban Development (HUD) has once again extended the deadline for reverse mortgage servicers to submit due and payable requests on Home Equity Conversion Mortgages (HECMs) entering default due to unpaid property charges.
In the first Mortgagee Letter of the year, ML 2016-01 provides an additional extension through April 17, 2016, to submit a due and payable request, as well as to take first legal action where the mortgagee is actively reviewing the borrower for loss mitigation in accordance with ML 2015-11.
The new mortgagee letter (ML 2016-01) only applies to the effective date of last year’s guidance in ML 2015-11, while also furthering the extension period that was provided last October via ML 2015-26. Aside from the deadline, all other policies in ML 2015-11 are unaffected.
Initially issued in April, ML 2015-11 permits reverse mortgage servicers to implement certain loss mitigation options to help borrowers become current on their mandatory obligations, including property charges as well as taxes and hazard insurance.
With this week’s mortgagee letter comes the latest in what has been a series of deadline extensions since June 2015, when HUD first permitted a “one-time extension” to submit a due and payable request no later than October 20, 2015.
By October 20, HUD further extended the timeframe, giving servicers through January 18, 2016 to submit due and payable requests. The new timeframe extension is now April 17, pending any further delays.
HUD could not be reached to comment as of press time.
Written by Jason Oliva