www.hudclips.org 


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

January 9, 1989
Mortgagee Letter 89-4
TO: ALL APPROVED MORTGAGEES
SUBJECT: HUD-Approved Housing Counseling Agencies
 
     The purpose of this Mortgagee Letter is to advise you of a
provision of Section 169 of the Housing and Community Development Act
of 1987 (amending Section 106 of the Housing and Urban Development
Act of 1968, 12 U.S.C. 1701x), which was recently enacted by Congress
and signed by President Reagan.  Under this provision of the Act,
mortgagees must notify all eligible delinquent mortgagors of the
availability of homeownership counseling provided both by mortgagees
and by nonprofit organizations which are approved by the Secretary
and experienced in homeownership counseling.  Please note that this
provision of the Act applies to all mortgage loans on residential
properties in your portfolio, whether conventional, governmentally
insured, or governmentally guaranteed (including those loans insured
or guaranteed by federal, state, and local government agencies).
This provision also applies to direct mortgage loans from federal,
state, or local government agencies that are now in your portfolio.
 
     A homeowner is eligible for this notification if the following
criteria are met:
 
     a)  The home loan is secured by property that is the
         principal residence of the homeowner; and
 
     b)  The home loan is not assisted under Title V of the
         Housing Act of 1949 (Rural Housing); and
 
     c)  The homeowner is, or is expected to be, unable to make
         payments, correct a home loan delinquency within a
         reasonable time, or resume full home loan payments
         because of a reduction of the homeowner's income
         resulting from:
 
          (i)  an involuntary loss of, or reduction in, the
               employment of the homeowner, the self-employment of
               the homeowner, or income from the pursuit of the
               occupation of the homeowner; or
 
         (ii)  any similar loss or reduction experienced by any
               person who contributes to the income of the
               homeowner.
                                                                 2
 
     HUD has determined that because of the lack of appropriated
funds, it is unable at the present time to provide a toll-free number
for financially distressed mortgagors to call for information
concerning HUD-approved housing counseling agencies.  However, to
assist the industry in satisfying the requirements of Section 169, we
have attached a list of all these agencies.  We will send updates of
this list quarterly to all approved mortgagees beginning in January
1989.  Please reproduce this list and distribute it to all staff in
your mortgage servicing, debt collection, foreclosure, and other
applicable departments so that they may inform delinquent and
defaulting mortgagors of the HUD-approved housing counseling
agencies nearest to their homes.
 
     If you have any questions regarding this letter, please contact
your local HUD office.
 
                          Sincerely yours,
                          Thomas T. Demery
                       Assistant Secretary
Attachment