General Loss Mitigation
Frequently Asked Questions

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This category includes all Loss Mitigation questions that are not specific to one of the five Loss Mitigation Options.

Question 1 - What is the priority order that Mortgagees must follow when applying HUD's Loss Mitigation Home Retention Options?

Answer - Mortgagee 2009-23, page 3, states HUD's Loss Mitigation Home Retention Options are to be reviewed in the following order: Special Forbearance, Loan Modification, Partial Claim and FHA's Home Affordable Modification (HAMP).

Question 2 - When a mortgagor has been determined ineligible for HUD's Loss Mitigation Program and the information utilized to make this determination was acquired by telephone, is the mortgagee required to send written notification of the denial to the mortgagor?

Answer - Mortgagee Letter 2000-05, page 11, paragraph H. "Evaluation of the Borrower's Financial Condition" in part states, mortgagees must advise the mortgagor, in writing, the reason for denial and allow the mortgagor at least seven (7) calendar days to submit additional information which may impact upon the mortgagee's evaluation.

Question 3 - What types of documentation is considered to be third party verification of a mortgagor's financial income?

Answer - Mortgagee Letter 2000-05, page 10, paragraph H, "Evaluation of the Borrower's Financial Condition" states in part "….Regardless of how the mortgagor's financial information was secured, the mortgagee must independently verify the financial information by obtaining a credit report, and any other forms of verification the lender deems appropriate."

Question 4 - What date does HUD acknowledge as the "execution date" for home retention option documents?

Answer - HUD does not have a definition for "execution date." HUD does recommend mortgagees not execute any home retention option document until after the mortgagor has signed it. Thereby, the mortgagee's timeline for submitting the incentive claim is not affected.

Question 5 - Can an exception be made on the occupancy requirement for loss mitigation retention options?

Answer - A variance request must be submitted on company letterhead to the NSC Oklahoma City Office, providing justification for the exception request for consideration.