FHA to Update Foreclosure Rules, Allow Zoom Meetings
A proposed change would bring FHA’s foreclosure rules into the current century, where interviews can be conducted online rather than mandated, in-person meetings.
WASHINGTON – The Federal Housing Administration (FHA) published a proposed rule in the Federal Register (FR), Modernization of Engagement with Mortgagors in Default, that is now open for public comment.
The proposed would modernize one aspect of the Department of Housing and Urban Development’s (HUD) current regulation requiring that mortgage lenders meet in person with borrowers in default on their mortgage payments.
The proposed rule, if finalized, would:
- Allow loan servicers to use electronic and other remote communication methods to conduct interviews with borrowers to satisfy FHA’s early default intervention requirements.
- Eliminate a requirement that loan officers make at least one trip to the mortgaged property to schedule a meeting with the borrower.
- Expand the meeting requirement to include borrowers who do not reside in the mortgaged property or have a mortgaged property that isn’t within 200 miles of their mortgagee, its servicer or a branch office.
If adopted, HUD says the regulation would align with advances in electronic communication technology and borrower engagement preferences, while also preserving necessary consumer protections.
HUD already experimented with waving the rule during the COVID-19 pandemic in early 2020 and, since then says mortgage borrowers successfully demonstrated their ability to communicate with borrowers who prefer electronic or other remote communication tools. The proposed rule would make the change permanent.
However, FHA’s existing regulations will remain in effect until the final rule is published and effective. Interested stakeholders may submit comments following the methods outlined in the Federal Register through Sept.29, 2023.
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