HUD Issues New Policy for Collecting Delinquent Section 202 Mortgage Payments
On Nov. 22, the U.S. Department of Housing and Urban Development (HUD) issued Notice H 2011-32, which provides information on the department’s new procedure for collecting delinquent Section 202 mortgage payments and describes the actions that must be taken to bring all Section 202 loans current.
According to the notice, “If a Section 202 loan cannot be brought current within 90 days and a workout agreement is not feasible, the hub director must follow the procedures for initiating foreclosure.”
In some circumstances the hub may be able to forestall or cure a default without entering into a workout agreement by waiving the monthly deposits to the Reserve for Replacement deposits or by authoring a release from a Debt Service Reserve Account, but certain project-management and property condition requirements must be met.