FHA proposes removing face-to-face requirement for borrowers in default

The Federal Housing Administration today proposed making permanent a pandemic-related rule that waives the Department of Housing and Urban Development’s requirement for mortgagees to meet in person with borrowers who are in default on their mortgage payments.

In early 2020, HUD waived the face-to-face meeting requirement for mortgagees because of the COVID-19 pandemic. Mortgagees have since demonstrated their ability to communicate with borrowers who prefer to meet using remote communication tools, FHA said. The proposed rule would make the change permanent by allowing servicers to use remote communication methods for conducting interviews with borrowers to satisfy FHA’s early default intervention requirements.

In addition, the proposed rule would eliminate the requirement that mortgagees make at least one trip to the mortgaged property to schedule a meeting with the borrower. It also would expand the meeting requirement to include borrowers who do not reside in the mortgaged property or have a mortgaged property that is not within 200 miles of their mortgagee, its servicer or a branch office.