www.hudclips.org 


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

June 19, 1992
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
MORTGAGEE LETTER 92-20
    TO:  ALL APPROVED MORTGAGEES
    ATTENTION:  Single Family Servicing Managers
    SUBJECT:  First Legal Action to Commence Foreclosure -- Texas,
                Colorado and Massachusetts
 
         On August 30, 1991, Mortgagee Letter 91-41 was issued with a
    list of the actions that the Department considers to be the first
    legal action to commence foreclosure in each state.  Questions
    have arisen about three of the states.  As a result, we have
    determined that it is necessary to modify what the Department
    considers to be the first legal actions for Texas, Colorado and
    Massachusetts.
 
    Texas
 
         The action listed in Mortgagee Letter 91-41 as the first
    legal action in Texas was "Recording of Notice of Sale."
    However, under Texas foreclosure law, the Notice of Sale is
    actually posted and then filed before it is recorded.  Therefore,
    we are revising our statement of the first legal action in Texas
    to read "Posting and filing of the Notice of Default."
 
    Colorado
 
         Mortgagee Letter 91-41 lists the first action in a
    foreclosure in Colorado as the "Recording of Notice of Election
    and Demand for Sale."  However, before this filing is
    accomplished by the public trustee, Colorado law provides that
    the noteholder must file with the public trustee of the county
    wherein the property is located a package of foreclosure
    documents containing Notices of the Election and Demand for Sale,
    the original deed of trust and a number of other certificates,
    affidavits and lists of persons, all of which are necessary for
    the public trustee to conduct the foreclosure.  Colorado law
    requires the public trustee to commence the foreclosure by the
    recordation of the Notice of Election and Demand for Sale within
    ten working days of its delivery by the noteholder.
 
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     Consequently, once the foreclosure documents have been delivered
to the public trustee, then the mortgagee has done everything within
its power and as required by law to commence foreclosure.  The actual
filing of the Notice of Election and Demand for Sale is entirely in
the hands of the public trustee.  Therefore, the first foreclosure
action for Colorado is changed to read "Filing of Foreclosure
Documents with Public Trustee."
 
Massachusetts
 
     In Massachusetts, before the power of sale portion of the
foreclosure is commenced, foreclosing attorneys customarily comply
with the judicial procedure established under Massachusetts law to
satisfy the requirements of the Soldiers' and Sailors' Relief Act.
This procedure begins with the filing of a complaint, and
subsequently involves an order of notice and publication.  It
concludes with an order of court.  Once signed, the order of court
constitutes proof of the compliance by the mortgagee with the
provisions of the Soldiers' and Sailors' Relief Act.
 
     Customarily, the actual power of sale foreclosure takes place
only after this front-end procedure has been successfully concluded.
The Soldiers' and Sailors' Relief Act portion of the foreclosure can
take as long as four months to conclude, while the power of sale
portion takes only a few weeks.  HUD's foreclosure time frame for the
prosecution of a foreclosure in Massachusetts includes the time it
takes to follow both of these procedures.  Consequently, the first
foreclosure action for Massachusetts on the list attached to
Mortgagee Letter 91-41 is changed to read "Filing of Complaint
Relative to Soldiers' and Sailors' Relief Act."
 
     If there are any questions on this Mortgagee Letter, please
contact the Single Family Loan Servicing staff in the appropriate HUD
Field Office.
 
                         Sincerely yours,
 
                         Arthur J. Hill
                         Assistant Secretary
 
                     *U.S. Government Printing Office: 1992 - 312-218/60183