As part of its response to the COVID-19 crisis, and as a result of the passage of the CARES Act, on April 1, 2020, HUD issued Mortgagee Letter 2020-6, “inform[ing] mortgagees of special Loss Mitigation Home Retention Options available to Single Family borrowers, as well as an extension period for Home Equity Conversion Mortgages” as a result of the CARES Act. The letter is effective immediately, and Mortgagees must have policies implementing these changes in place by April 30, although they may begin utilizing them immediately.
The letter adds a new section to HUD Handbook 4000.1 specifically dealing with the COVID-19 crisis, and extends deadlines in the following sections:
- Mortgagee Letter 2015-10, HECM Due and Payable Policies;
- Mortgagee Letter 2015-11, Loss Mitigation Guidance for HECMs in Default due to Unpaid Property Charges; and
- 24 C.F.R. §206.125, Acquisition and Sale of Properties and §206.205, Property Charges
The letter addresses the following areas:
- Forbearance for Borrowers Affected by the COVID-19 crisis;
- COVID-19 National Emergency Standalone Partial Claim;
- Exclusion of Borrowers impacted solely by the COVID-19 crisis from FHA’s PDMDA Guidance in Handbook 4000.1 for the purposes of the COVID-19 crisis; and
- Extension Period for Home Equity Conversion Mortgages Affected by the COVID-19 crisis.
ML 2020-6 is available here.