HUD Face-to-Face: Is it a Condition Precedent?
January 15, 2021
Source: DS News
Editor’s note: This story originally appeared in the January edition of DS News.
Florida’s Fourth District Court of Appeals has recently issued two new opinions concerning the “HUD Face-to-Face Provision.”
Both actions involved the involuntary dismissal of foreclosure cases at trial based upon the lender’s failure to present prima facie evidence showing it complied with 24 C.F.R 203.604(b), specifically those minimum actions required to comply with the reasonable efforts expectation of the rule when a face-to-face interview has not been conducted. (It should be noted that Malcolm Harrison was the appellee in both cases and the servicer prevailed in both cases by overturning the circuit courts’ ruling.) 24 C.F.R 203.604(d) illuminates the specific actions required to comply with the reasonable efforts exception: (d) A reasonable effort to arrange a face-to-face meeting with the mortgagor shall consist at a minimum of one letter sent to the mortgagor certified as dispatched by the United States Postal Service (USPS). A reasonable effort shall also include at least one trip to see the mortgagor at the mortgaged property unless the mortgaged property is more than 200 miles from the mortgagee, its servicer, or a branch office of either; or it is known that the mortgagor is not residing in the mortgaged property.
Based on the above rule, a lender must meet a two-prong test: (1) visit the borrower(s) at least once to attempt a face-to-face interview, and (2) demonstrate a letter was sent via USPS to the borrower(s) asking to schedule the face-to-face interview.
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