www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

June 19, 1995
 
Mortgagee Letter 95-29
 
TO:  ALL APPROVED MORTGAGEES
 
ATTENTION:  SINGLE FAMILY SERVICING MANAGERS
 
SUBJECT:  Foreclosure and Acquisition of Property
          Notice to Occupants of Pending Acquisition
 
     This Mortgagee Letter provides guidance concerning the
Department's requirements for notice to occupants of a property
which is pending acquisition by HUD.  The requirement is that at
least 60 days, but not more than 90 days before the mortgagee
reasonably expects to acquire title (or within 10 days after
learning that title will be acquired by deed-in-lieu of
foreclosure), the mortgagee must notify the mortgagor and each head
of household who is actually occupying a unit of the property of
its pending acquisition by HUD.  This requirement is set forth in
HUD Handbook 4330.1 REV 5, Administration of Insured Home
Mortgages, at paragraph 9-11. A., and in HUD regulations at 24 CFR
203.675.
 
     The Department has found that some flexibility from strict
adherence to the 60 to 90 day requirement is necessary to avoid, to
the maximum extent possible, a requirement to delay a foreclosure
sale or remail the notice of pending acquisition.  For example,
where a foreclosure sale date is set for less than 60 days
following completion of bankruptcy proceedings, the mortgagee
cannot comply unless it requests a delay in the foreclosure sale.
Generally, a scheduled foreclosure sale should not be postponed to
comply with the minimum 60-day requirement.  However, in all
jurisdictions, eviction must not be initiated by the mortgagee
except in compliance with all other provisions of the occupied
conveyance regulations, i.e., eviction cannot begin until the
earlier of 1) notification by the local office that no Request for
Occupied Conveyance has been received, 2) notification by the local
office of a final rejection of an occupant's Request for Occupied
Conveyance, or 3) where there has been no notification from HUD 45
days after the date of the mortgagee's notice of pending
acquisition.
 
     Another situation that warrants some flexibility is where the
mortgagee has already provided the notice of pending acquisition,
but the foreclosure sale is subsequently postponed for an extended
period, as can occur as the result of bankruptcy proceedings.
Although each case is judged on its own merits, in this type of
circumstance the Department would generally consider that a notice
of pending acquisition mailed within 120 days of the mortgagee's
acquisition of title would not have to be resent.
 
     These circumstances are exceptions, rather than the rule.  In
all cases, mortgagees must document the reasons the notice of
pending acquisition was not provided within the required 60 to 90
days.  If the reasons are beyond the control of the mortgagee, and
the mortgagee's file is thoroughly documented, the Department will
not raise an issue of compliance.  Noncompliance without good cause
and adequate documentation, however, will be viewed as poor
servicing and may subject the mortgagee to administrative
sanctions.
 
     Should you have any questions regarding this letter, please
contact the local HUD office.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner