[Federal Register Volume 89, Number 225 (Thursday, November 21, 2024)]
[Rules and Regulations]
[Pages 92033-92034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27077]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 203
[Docket No. FR-6353-N-03]
RIN 2502-AJ66
Modernization of Engagement With Mortgagors in Default: Partial
Extension of Compliance Date
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, U.S. Department of Housing and Urban Development (HUD).
ACTION: Final rule; partial extension of compliance date.
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SUMMARY: This document extends the compliance date for certain
provisions of HUD's final rule entitled ``Modernization of Engagement
with Mortgagors in Default'' that require mortgagees to conduct
meetings with all mortgagors in default. This requirement includes
borrowers who do not reside in the mortgaged property and with
mortgagees where the relevant property is not within 200 miles of the
mortgagee, its servicer, or a branch office, which were excepted under
HUD's existing regulation for conducting meetings with mortgagors in
default. The compliance date for these provisions is extended until
July 1, 2025. HUD is taking this action to permit mortgagees sufficient
time to update their mortgage servicing processes and procedures to
comply with the policy that will be established in a forthcoming
mortgagee letter entitled ``Modernization of Engagement with Borrowers
in Default.''
DATES: The compliance date for the final rule amending 24 CFR 203.604,
published August 2, 2024, at 89 FR 63082 as it applies to certain
mortgagors and properties is extended until July 1, 2025. See
SUPPLEMENTARY INFORMATION for more information.
FOR FURTHER INFORMATION CONTACT: Elissa Saunders, Director, Office of
Single Family Asset Management, Office of Housing, Department of
Housing and Urban Development, 100 South Charles Street, Bank of
America Building, Tower II, 11th Floor, Baltimore, MD 21201; telephone
number 202-402-2378 (this is not a toll-free number). HUD welcomes and
is prepared to receive calls from individuals who are deaf or hard of
hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
SUPPLEMENTARY INFORMATION:
I. Background
On August 2, 2024, HUD published a final rule entitled
``Modernization of Engagement with Mortgagors in Default'' (FR-6353-F-
02), available at 89 FR 63082. The final rule revises requirements in
24 CFR 203.604 for mortgages insured pursuant to part 203, except for
mortgages insured on Indian Land pursuant to section 248 of the
National Housing Act. The effective date of the final rule is January
1, 2025.
II. Partial Extension of Final Rule Compliance Date
Mortgagees are not required to comply until July 1, 2025, with the
provisions of the Modernization of Engagement for Mortgagors in Default
final rule that require mortgagees to conduct meetings with mortgagors
who do not reside in the mortgaged property and where the relevant
properties are not within 200 miles of the mortgagee, its servicer, or
a branch office, which mirror the two exceptions currently codified in
24 CFR 203.604(c).
As revised by the Modernization of Engagement with Mortgagors in
Default final rule, 24 CFR 203.604(a)(3) will require that ``[a]
reasonable effort to arrange a meeting with the mortgagor shall consist
of, at a minimum, two
[[Page 92034]]
verifiable attempts to contact the mortgagor utilizing methods
determined by the Secretary.''
Mortgagees have repeatedly stated that they require sufficient time
to update their processes and procedures, including making updates to
their information technology, staff training, internal standard
operating procedures, revisions to contracts, and mortgagor-facing
documents and communication. Mortgagees have also stated the need for
adequate time to update their internal quality controls, hire
additional staff, align their procedures for HUD's new requirements
with requirements from other Federal agencies, establish new contracts
for specific outreach methods, and update internal documentation
requirements, among other things.
Given that HUD has not yet provided guidance on complying with the
revised requirements to 24 CFR 203.604(a)(3) to enable Mortgagees to
begin adjusting their processes and procedures, HUD is partially
extending the compliance period for the Modernization of Engagement
with Mortgagors in Default final rule until July 1, 2025, to permit
mortgagees to continue to rely upon two exceptions to the meeting
requirements that exist in Sec. 203.604(c) as it is currently
codified.
The two additional exceptions that mortgagees may continue to rely
upon are that a meeting with the mortgagor is not required if:
(1) The mortgagor does not reside in the mortgaged property; and
(2) The mortgaged property is not within 200 miles of the
mortgagee, its servicer, or a branch office of either.
HUD believes that this partial extension of the compliance period
will allow mortgagees sufficient time to implement the guidance in the
forthcoming Modernization of Engagement with Borrowers in Default
Mortgagee Letter \1\ and to ensure mortgagee compliance with the
revised requirements in 24 CFR 203.604. Mortgagees may optionally elect
to comply with the entirety of the Modernization of Engagement with
Mortgagors in Default final rule beginning on January 1, 2025, the
effective date of the rule.
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\1\ When the Modernization of Engagement with Borrowers in
Default Mortgagee Letter is published, it will be accessible at
https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee until incorporated into the Single Family Housing Policy
Handbook 4000.1.
Julia R. Gordon,
Assistant Secretary for Housing, Federal Housing Commissioner.
[FR Doc. 2024-27077 Filed 11-20-24; 8:45 am]
BILLING CODE 4210-67-P