Mortgage and Foreclosure Rights Notice

I just read an update to the Housing and Urban Development Act of 1968 which under Sec. 106(c)(5)(A)(ii)(IV)mentions a notice to servicemembers. This was in the FDIC Report Bulletin No.10. August 31, 2006.

Does anyone know where I can find a copy of the notice explaining the mortgage and foreclosure rights of servicemembers, and the dependents of such servicemembers, including the toll-free military one source number to call if servicemembers or their dependents require further assistance. Is this just for FHA loans or conventional mortgages too?

I don't remember hearing anything about this. Any assistance would be appreciated.

I am not familiar with the FDIC bulletin you mention. But I don't know why this isn't the HUD Homeownership Counseling Notice HUD already has required under this law. That notice doesn't use the term "servicemember" but it is the same as far as I can tell.

HUD has published a Servicemembers Civil Relief Notice dated 11-20-2006(Mortgage Letter 2006-28). The notice must be sent to all homeowners in default on residential mortgage within 45 days from date of missed payment and include a toll free military phone number.

The mortgage letter has the notice as an attachment. Will this be a one time notice, or will the notice be required each time the servicemember is past due?

The "notice" is really a letter! This is going to have be an additional document to the HUD Counseling notice that we print on the past due notice which is about 3"x5".

I don't see where this letter tells us we only have to send it once, so I think we will send it everytime they are 45 days past due. Also, I think we send it to all homeowners not just servicemembers. It says "Be sent to all homeowners who are in default on a residential mortgage." I suppose this is in case the defaulting party is a dependent of the servicemember?!?!? What do you think?

The notice in attachment 1 is titled Servicemembers Civil Relief Act Notice. I would assume this only needs to be sent to borrowers/servicemembers who have enacted the provisions afforded under the SCRA and are 45 days delinquent. However, there is probably no harm in sending the notice to all deliquents. Does anyone have any more detail or information on this notice? Thank you.

More scuttlebut: I heard somewhere that the notice for military personnel has to be separate from the HUD counseling notice. Has anyone heard the same thing or can provide more info?

From reading this I don't think that an institution can wait until the servicemember is 45 days late, due to the statement

"Be made within 45 days from the date a missed payment was due, unless the homeown pays the overdue amount before the expiration of the 45 day period."

To me it means that the servicemeber must be notified prior to him/her being 45 days deliquent.

Also, I think that if you are holding a HUD loan and the customer is past due on whatever day limit you set, you must send this notice to them whether they are covered by SCRA or not. After reading the notice a few more times, it appears to be for the homeowner who does not know that they are covered by the SCRA and this gives them notice that they are protected and have legal rights.

Is this only for HUD loans, all mortgage loans or all 1-4 real estate secured loans, i.e. Home Equity, HELOC and Home Improvement?

Researching further, it is my understanding this applies to any loan on a principal dwelling, open or closed, and without any regard to lien position. This applies to servicemember's or their dependents and does not require the servicemember to be a a borrower on the loan. Therefore, this notice would need to be sent to all deliquent applicants to ensure a borrower which may be a service member dependent is sent the notice. Please let me know if anyone has additional information. Thanks!

Is this indicative of an 800 number for homeownership counseling or an 800 number for the financial institution? Our bank does not have an 800 number...

Does anyone have a link to this? I must have glazed it over thinking it was the original 3x5 notice I already send.

This link will take you to HUD's FHA Mortgagee Letters. This particular letter is the first letter under 2006 letters. Doc Number 06-28.


http://www.hud.gov/offices/hsg/mltrmenu.cfm

THANKS!! I appreciate it.

I just spoke with someone at HUD's National Servicing Center. I was told this notice (#2006-28) supersedes all prior counceling notices, and applies to all principal dwelling loans regardless of military status. Our counceling notice comes out on our 15 day past due notice. If we add the phone number for the SCRA requirements, and identify it as such, to the past due notice, will we still be in compliance? I didn't get into this with the Service Representative, she was difficult to understand and rude.

I also have had some difficulty getting clear answers. Does this need to go out every time a borrower is 45 days deliquent? Is this retroactive back to June 5? Does anyone have a link to the original HUD notice on this issue back in June? Thanks!

I know there is a severe lack of information on this matter but I wanted to see how other banks are setting this up. Must the notice be addressed to every borrower on the loan in question, or is sending the notice to the primary borrower acceptable? (I realize I'm probably soliciting opinions more than anything else since HUD has not seen fit to explain this new requirement very thoroughly.)

We understood the notification requirements to be limited only to HUD insured loans due to this statement in the HUD Mortgagee Letter: "All mortgage loans, including conventional mortgages and mortgages insured by HUD are subject to the notification requirement that became effective June 5, 2006." (emphasis added)

After I orginally typed that, I did a little more research, and I'm seeing that there was a bill to add this notice to the HUD Homeownership Counseling Notice if it's going to a service member or dependent of the service member. (S.B. 1814) I haven't been able to find the final result of that yet, though. Probably just as easy to just provide the notice with the other HUD notice.

I take that same passage to prove just the opposite. Conventional mortgages and mortgages insured by HUD are two different things. Both are included, per that citation.

You are right. I take back what I said.

I have spoken with 3 different people at HUD and here is what I was told:

The notice must be sent to all homeowners who are in default of a residential mortgage, both convectional and mortgages insured by HUD.

The notice must be sent within 45 days every time the homeowner is in default, not just the first time.

In the case of multiple applicants, only one notice is required to be sent to the address on the delinquent accounts. Separate notices for each applicant is not required.

If anyone has anything else, please share. Thanks!

I did a search on google.com to see what I could find. Here's a link to what the Credit Union National Association told its members about this. http://www.cuna.org/newsnow/archive/list.php?date=113006#29223

Back to my post of 11-17, how is this different than the notice being sent now? The law seemed to track back to that.

this whole thing is monumentally confusing after reading this thread and reading HUD which is monumentally confusing on its own and doesn't need and help.

1. what letter are you sending at 45 days?
2. where can i find a template for this letter?
3. is SCRA an addendum to this letter?

Andy, it appears that the required notice (Attachment 1)would need to be sent. In addition, the toll free number is different. Other than that, the basic requirements seem to be the same.

The problem is that we will go from being able to provide the simple HUD statement and toll free number, to the lengthy notice of rights.

But, perhaps I'm simplifying this too much.

that's what i draw from this as well. i drafted a combined "regular" notice/SCRA notice which is 95% SCRA going by letters used in the document.

My take is this: It applies to any mortgage that might have rights under the SCRA. To be safe, you would likely need to send both the HUD counseling letter AND this letter stating service members rights and their exclusive 800 number when a loan is in default...maximum delay 44 days.

This can't take place of the regular HUD letter, as non-service members would not be able to use the number or the information/rights contained in this SCRA-specific letter.

anyone have the link to HUD couselling letter and number?

http://www.hudclips.org/sub_nonhud/cgi/pdfforms/06-28ML.doc

Just saw this thread....

I called HUD as well since their letter was a little, um, vauge. They said it should be sent to all mortgage loan customers in conjunction with the current notice, not just customers that have invoked their rights under SCRA. Also, he stated that it would go to all loans secured with a primary dwelling, regardless of lien position.

So I'm assuming (!?!?) that I could logically make a copy of Attachment 1 of HUD's Mortgage letter 2006-28 and send it with my past due letters as a second page?

yes, but be sure to include the bank's name, address, and contact information under the heading How Does a Servicemember or Dependent Request Relief under the SCRA?

Good Point!~!

Does this new notice replace the HUD Homeownership Counseling notice or is it sent in addition to the other notice?

I have looked at the Attachment 1 Page 6; does this mean you need to include that entire page? Or just a portion of that page?

under the letter issued it includes --
All mortgages loans, including conventional mortgages and mortgages insured by HUD are subject to the notification requirement....

does this mean this notification could also required on business loans?

In addition to the homeownership counseling notice.

The entire page. Don't forget to complete the section ": Lender should place its name, address and contact information here)."

Note the following section of the notice (emphases mine):

What Legal Protections Are Servicemembers Entitled To Under the SCRA?

• The SCRA states that, a debt incurred by a servicemember, or servicemember and spouse jointly, prior to entering military service shall not bear interest at a rate above 6 percent during the period of military service.
• The SCRA states that, in a legal action to enforce a debt against real estate that is filed during, or within 90 days after the servicemember’s military service, a court may stop the proceedings for a period of time, or adjust the debt. In addition, the sale, foreclosure, or seizure of real estate shall not be valid if it occurs during, or within 90 days after the servicemember’s military service unless the creditor has obtained a court order approving the sale, foreclosure, or seizure of the real estate.
• The SCRA contains many other protections besides those applicable to home loans.

It appears to me that any real estate secured loan might very well fall under this notification requirement.

Are both of these notices just related to primary dwelling loans, or any loan that is secured by a 1-4 family dwelling?

Any loan secured by 1-4 family dwelling.

This is already effective, correct? I have a whole folder of info printed on this and can't seem to put my finger on the effective date.

Thanks!

Correct.

Thanks! I guess I better get this notice implemented.

FYI HUD has this out for comment with comments due by 04-03-07, Docket No. FR-5121-N-06. FR 02-02-07, Vol 72, No. 22, Pg 5071) I was confused when reading it about what it was for, and the response was that we could comment on any facet of the requirement.

Personally, so long as there wouldn't be an over-disclosure issue I'd like to see the notices combined so one could be sent meeting all the requirements. That may be worth mentioning.

Would this apply to Agriculture loans? We have a lot of farmers where we take the whole farm as collateral including the dwelling. Thanks for any guidance!

Since a farmer can be protected when called up/enlisted, sure.

The loan type we use for commercial loans secured by 1-4 family is not broken out by owner occupied or rental property. Our software company will generate the letter based only on loan types. How is everyone else handling this?

Our software is the same. We can only generate notices by loan type. We have not established different loan types for owner-occupied vs rentals. Titled mobile homes are another concern. We set up one loan type for all title secured loans -- vehicle, boats, RVs, mobile homes.

I'm also interested in how other banks are handling.

Same here, please help.

We are including this notice with collection letters sent between the 30th and the 45th day of delinquency.

I just got a copy of the Federal Register. I had thought this could be tagged on to the Homeownership Counseling notice, but the SCRA notice is at least a full page. I guess we will just have to make it mandatory to include the letter in the same envelope as the Homeownership Counseling.

I have noticed that several people said the wording was different in the Federal Register and the Mortgage Letter 2006-28. It is my opinion that the Fed Reg wording is more current (dated March 07) and that is what should be used. If I am wrong in this interpretation, please let me know.

Does anyone know if ARTA or ITI has this notice in their library? I am getting blank stares here at my bank.

Is this still be best source to obtain the exact wording of the notice?

HUD Mortgagee Letter 2006-28

Our mainframe software has finally published a notice and I'm trying to review it. I've compared it to the HUD Mortagee Letter and the Notice published in the Federal Register. Nanwa made the comment that the Federal Register wording should be used because that is the most recent publication. That makes sense to me. But the phone numbers are different. In fact, the phone number in the federal register to call from outside the United States doesn't even look like a phone number. I was able to determine from going to the MilitaryOneSource website, that there is an extra "7" tacked on to the end of the number. But I cannot find a verifiable phone number for the "International Collect." There are some other differences in the text for which I'm comfortable using the Federal Register version. Any comments?

Actually the 800-3429-6477 for calls from overseas is correct. The following are samples of links showing the numbers for military personnel to call.

http://www.myarmylifetoo.com/skins/malt/q_mod_2a285ab0-5db1-4f36-9b91

http://www.usmc-mccs.org/news/newsstory.cfm?id=12553

http://www.tricare.mil/mybenefit/Profile...eds%2FResources

Thanx for the links. However, I am not authorized to view the first link.

I made a stupid assumption about the phone number when I looked on the "contact us" information on the MilitaryOneSource website. It's almost like the United States number with a seven added on the end, making the phone number appear to have too many numbers.

From United States: 1-8003429647
Outside the U.States: 80034296477

Not sure what happen to the first link. I can't access it now either.