www.hudclips.org 


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 88-21
TO:  ALL APPROVED MORTGAGEES
SUBJECT:  Deeds-in-lieu of Foreclosure
 
        The purpose of this Mortgagee Letter is to advise and remind
mortgagees that HUD encourages mortgagees to pursue opportunities for
the voluntary conveyance of deeds.  Acceptance of deeds-in-lieu of
foreclosure expedites property acquisitions and reduces costs.
 
        Regulation 24 CFR 203.357 and HUD Handbook 4330.1,
Administration of Insured Home Mortgages, Chapter 9, set forth HUD's
guidelines on deeds-in-lieu.  We request mortgagees to review those
guidelines.
 
        We remind mortgagees that, prior HUD approval is not required
for mortgagors owning one property.  However, mortgagees must obtain
prior HUD approval when pursuing acceptance of a deed-in-lieu from
corporate mortgagors or mortgagors owning more than one property.
These requests must be submitted to the local HUD Office which has
jurisdiction where the property is located.
 
        Mortgagees must document their servicing records regarding
their acceptance of a deed-in-lieu of foreclosure.  If mortgagees do
not follow 24 CFR 203.357, the claim for insurance benefits will be
returned to the mortgagee.  Field Offices and Headquarters staff will
look for such documentation in their mortgagee reviews.
 
        If you have any questions regarding this letter, contact your
local HUD Office.
 
                                        Sincerely yours,
                                        Thomas T. Demery
                                        Assistant Secretary