It has come and gone more than once, but homeownership counseling is back on the books. There has been little fanfare about this, possibly because HUD maintained a policy of pretending that it had never sunsetted in the first place. However, it is back and you should take steps to comply.
The requirements are triggered whenever there is a loan secured by a one-family residential property. Thus, most of the mortgage loans you make are subject to the requirement.
The creditor must notify the homeowner who fails to pay any amount by the due date. Failure to pay by the due date is the actual trigger, but the creditor has 45 days to actually send the notice. If the consumer pays before the notice is sent, the notice requirement disappears. As a practical matter, the creditor may wait the full 45 days to mail the notice. This provides a time period during which most customers will make the payment. Anyone who has become 45 days late is actually two payments behind when the notice must be sent.
The notice must tell the customer about the availability of homeownership counseling offered by the creditor and also advise the customer about homeownership counseling information available through HUD by including the list of HUD-approved counseling organizations or by providing HUD's toll-free telephone number (1-800-569-4287) through which the consumer can obtain information about homeownership counseling.
For more information, see the articles posted at: www.bankersonline.com and the FIL-43-2002 issued by the FDIC.
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