Menu

Showing 4 posts in HUD.

Mortgage Creditors Confront Five Year Extension of Mandatory Pre-Foreclosure Mediation Process in Rhode Island

The Rhode Island Senate recently approved a five-year extension of R.I. Gen. Laws § 34-27-3.2, which had established a mandatory mediation program any out-of-state mortgagee must follow before initiating foreclosure on owner-occupied, residential property. The current law is set to expire on July 1, 2018. If approved by the House, Senate Bill 2270 will extend the expiration date to July 1, 2023. Companion legislation, House Bill 7385, which sought to repeal the sunset clause thereby removing rather than extending the expiration date, has stalled. Rhode Island Banking Regulation 5, which clarifies mortgagees' duties under § 34-27-3.2 and the consequences of a mortgagee's failure to comply with the law and regulation, would likewise cease if the law expires. More ›

HUD Regulation Requiring Face-to-Face Meeting Presents Compliance Challenge for Lenders Seeking Mortgage Foreclosure

In Dan-Harry v. PNC Bank, the Rhode Island federal court concluded that a mortgagor may bring a claim for damages and other remedies against a mortgagee on allegations of failure to conduct a pre-foreclosure face-to-face meeting required for breach of an FHA-insured mortgage. Dawari Dan-Harry obtained an FHA-insured mortgage loan to purchase property in Providence, Rhode Island, which included in Paragraph 9(d) the following provisions: "Regulations of HUD Secretary. In many circumstances regulations issued by the Secretary will limit Lender's rights, in the case of payment defaults, to require immediate payment in full, and foreclose if not paid. This Security Instrument does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary." PNC Bank foreclosed on the mortgage and sold the property at auction to a third-party in January 2017. While continuing to occupy the property, Dan-Harry sued PNC for damages and to void the foreclosure sale on allegations that PNC failed to comply with HUD regulation 24 C.F.R. § 203.604(b), which requires a mortgagee to have a face-to-face meeting with the mortgagor or make a reasonable effort to arrange such a meeting before the mortgage becomes three months delinquent in payments. More ›

A New HUD Rule for Reverse Mortgages, with Additional Rule Changes Proposed in Congress

This past month, Washington was busy with rule changes and proposed legislation that underscores the ongoing debate over the origination and foreclosure of reverse mortgages. First, the U.S. Department of Housing and Urban Development reduced the maximum amount a reverse mortgage applicant can borrow. Previously, the maximum amount was exclusively tied to the property's value (at either 60% or 70%). Under the new rule, HUD has tied that maximum amount to three criteria: applicant's age, loan rates and the value of the property. While it is unclear how these new criteria will impact the maximum amount, the Wall Street Journal reports that Lending Tree's chief sales officer anticipates that a typical applicant will now be able to borrow 58% on the property's value, down from an average of 64%. Second, HUD increased the upfront insurance premium charged on any reverse mortgage from between .5%-2.5% percent and depending on the amount borrowed to a flat 2%. Given the reduction in amount that an applicant can borrow and an increase in upfront insurance payments, HUD's new rules appear aimed at benefiting lenders. The new rules went into effect on October 2, 2017. More ›

Mortgage Foreclosure Alert: Attaching Promissory Note in Illinois Sufficient to Show Standing; but HUD Letters Require Proof of Dispatch

In a foreclosure action, the Illinois Appellate Court recently held that the foreclosing lender established its standing by attaching the blank-indorsed note to its complaint, but reversed judgment and remanded for the trial court to determine if a letter required by the Secretary of Housing and Urban Development ("HUD") regulations was actually dispatched. More ›

Search
Subscribe via Email