HUD has provided expanded relief for borrowers who have FHA-insured loans and face COVID-19 hardships. As with its standard loss mitigation program, HUD generally makes COVID-19 policy updates through Mortgagee Letters, which communicate program updates to servicers. The relief available in response to the COVID-19 pandemic builds on FHA’s current loss mitigation waterfall found at HUD Handbook 4000.1.
In addition to the relief provisions described below, HUD has also eased regulations on servicers. On March 13, 2020, it issued a one-year waiver of the face-to-face meeting requirement found at 24 C.F.R. 203.604, and it has extended the waiver until the end of 2021.85 Under the waiver, the servicer still must attempt to contact the borrower pursuant to 24 C.F.R. 203.604 using alternative methods such as email, phone, and video conferencing. HUD implemented the waiver in light of the pandemic.
85 HUD, Temporary, Partial Waiver of 24 CFR §203.604 Servicing Responsibilities, Contact with the Mortgagor (Feb 2, 2021), available at https://www.hud.gov; HUD, Temporary, Partial Waiver of 24 CFR §203.604 Servicing Responsibilities, Contact with the Mortgagor (Mar. 13, 2020), available at https://www.hud.gov. For a discussion of HUD’s requirements, see National Consumer Law Center, Home Foreclosures Ch. 6 (2019), updated at www.nclc.org/library.