Question: I have a question regarding the article you wrote on "Homeownership Counseling Requirement Revived".
I received information from another source which says to satisfy our requirement we could add the following language to our first delinquency notice:
"For homeowners counseling, call 1-888-466-3487".
In your opinion, would this be sufficient?
I question it because of what you stated the content of the notice should include:
#2, "if provided to an eligible mortgage applicant, state that completion of a counseling program is required for insurance under section 20e of the national Housing Act"
What is considered an "eligible mortgage applicant"?
Answer: There are two groups of people to whom the notice might need to be supplied: applicants and delinquent borrowers. As I stated in "Homeownership Counseling Requirements Revived", most banks don't have to provide notices to applicants because they don't have any applicants who meet the definition of "eligible mortgage applicant".
I think that if the goal is to really help the borrower get back on track, it would be better to include an extra sentence that says "Homeownership counseling may help you. To obtain the number of a HUD-approved homeownership counseling agency near you, call 1-888-466-3487." That's just a personal preference, however, and the sentence you quoted would probably suffice, since there is no more specific guidance in the law.
The original version appeared in the January/February 2002 edition of the Oklahoma Bankers Association Compliance Informer.
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