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#2278940 - 12/19/22 05:50 PM Loss Mitigation
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,561
Bloomington, IN
OK something new for me was asked.

I've searched the Regulation, the ACT, the Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) Mortgage Servicing Rules Small entity compliance guide and Google and I have not found an answer.

Does Loss Mitigation apply to second and/or vacation homes? From everything I've seen if the loan is subject to RESPA then Loss Mitigation applies. I have not found any exemptions from Loss Mitigation for those homes.

Am I missing something?
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The opinions expressed are mine and they are not to be taken as legal advice.

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RESPA
#2278942 - 12/19/22 05:56 PM Re: Loss Mitigation Dan Persfull
Inherent_Risk Offline
Platinum Poster
Joined: Jan 2017
Posts: 575
1024.30(c)(2) The procedures set forth in §§ 1024.39 through 1024.41 of this subpart only apply to a mortgage loan that is secured by a property that is a borrower's principal residence.

I believe we usually treat all consumer purpose the same, but I believe loss mit requirements (1024.41) only apply to primary residences.

Official interpretation of Paragraph 30(c)(2).
1. Principal residence. If a property ceases to be a borrower's principal residence, the procedures set forth in §§ 1024.39 through 1024.41 do not apply to a mortgage loan secured by that property. Determination of principal residence status will depend on the specific facts and circumstances regarding the property and applicable State law. For example, a vacant property may still be a borrower's principal residence.

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#2278946 - 12/19/22 06:41 PM Re: Loss Mitigation Dan Persfull
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,561
Bloomington, IN
Thank thank you....I never looked at 1024.30.
Last edited by Dan Persfull; 12/19/22 07:42 PM. Reason: change typo
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2291981 - 12/27/23 08:42 PM Re: Loss Mitigation Dan Persfull
Compliance010223 Offline
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Joined: Mar 2023
Posts: 22
We have an outreach program for contacting borrowers 180 days prior to maturity to offer options for the balloon payment on their maturing HELOC. We've modeled our maturing HELOC letter after the written notice required by 1024.39(b)(1). Do loss mitigation rules apply to Home Equity Lines of Credit nearing maturity? Is the notice we are sending required to include the website to access either the CPFB list or the HUD list of homeownership counselors or counseling organizations, and the HUD toll-free telephone number to access homeownership counselors or counseling organizations?

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#2291993 - 12/28/23 11:54 AM Re: Loss Mitigation Dan Persfull
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,605
Galveston, TX
That section of RESPA is governed under the following:

1024.30—Scope.

(a) In general. Except as provided in paragraphs (b) and (c) of this section, this subpart applies to any mortgage loan, as that term is defined in § 1024.31.

1024.31 - Definitions
Mortgage loan means any federally related mortgage loan, as that term is defined in § 1024.2 subject to the exemptions in § 1024.5(b), but does not include open-end lines of credit (home equity plans).

Also, even if it was covered, since the loan is not yet delinguent, you can pretty much do what you want to.
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#2292108 - 01/03/24 01:21 PM Re: Loss Mitigation Dan Persfull
Compliance010223 Offline
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Joined: Mar 2023
Posts: 22
Thank you!

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