www.hudclips.org 


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410

April 25, 1984
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 84-12
TO:  ALL APPROVED MORTGAGEES
SUBJECT:  Reporting Defaulted Mortgagors to Credit
          Bureaus
 
     HUD is implementing procedures for improving the effectiveness
of our debt collection activities in accordance with the Debt
Collection Act of 1982.  Although the Act does not prescribe any
specific action on the part of mortgagees servicing FHA-insured home
mortgages, HUD encourages mortgagees to assist HUD in our debt
collection effort by notifying the appropriate credit reporting
agency when foreclosure action is initiated on a defaulted loan.
Notification of defaulted cases to credit reporting agencies may help
decrease the amount of additional debt that the mortgagor acquires,
which could be beneficial to both the mortgagee and HUD.
 
     Mortgagees must not report any case to a credit reporting agency
where HUD determines that the case is eligible for mortgage
assignment.  Mortgagees are still responsible for making a
determination as to whether a request to assign the mortgage is
appropriate under the criteria set out in Chapter 8, paragraph 126,
HUD Handbook 4330.1 , Administration of Insured Home Mortgages, and
for sending the mortgagor the notices required by that paragraph. Any
questions concerning these procedures should be referred to Art
Orton, Single Family Servicing Division, (202) 755-6672.
 
                                   Sincerely,
 
                                   Maurice L. Barksdale
                                   Assistant Secretary
 
_____________________________________________________________________