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MEMO
#1039: New Mortgagee Letter 2003-05 - 05/04/03
HUD
Mortgagee Letter 2003-05 becomes effective May 4, 2003. This
means that for all work completed on or after May 4,
2003, regardless of when the work was ordered, the
various changes addressed in this letter, including revised
pricing for certain work, will apply.
Below
is our summary of the changes presented in Mortgagee Letter
2003-05. Please review this summary and the original Mortgagee
Letter (attached) and be sure you are aware of any changes
that affect areas where you perform work.
Effective
Date
This Mortgagee Letter is effective as of Sunday, May 4, 2003.
As noted above, the provisions of the new letter will apply
for all work completed on or after May 4, regardless
of when the work was ordered.
Photographs
HUD has increased the maximum number of photos verifying property
condition at the time of the initial inspection from six (6)
to fifteen (15) photographs. HUD wants to assure that the
condition of the property at the time of initial secure is
fully documented to support the mortgagee's statements as
to damages and neglect. We will be posting a more detailed
memo regarding photos and other documentation of property
condition shortly. Please see the following link to an additional
memo on this issue: Memo
#1009
Inspections
Ten zip codes were added to the Hot Zones, where inspections
are required twice a week on a year-round basis. Hot Zone
zip codes are now located in Gary, Indiana; Chicago, Illinois;
Los Angeles, California; and Long Beach, California (see attached
for zip code listings).
Securing
The "One-Time Securing Fee" has been renamed the
"Maximum Allowable Securing Fee." Overall, the Maximum
Allowable Securing Fee has been reduced. However, the cost
of temporary roof repairs has been separated from this allowable
and given a separate cost allowable of $250 in every state.
At this
point, we do not have confirmation that resecuring can be
completed without bid approval, so we are not changing our
policy on this. We will still require bids to resecure a property
and will treat the Maximum Allowable Securing Fee as a one-time
securing fee, until we receive something in writing from HUD
that tells us otherwise.
There
were specific variations listed for both Delaware and the
City of Philadelphia. These contain no changes from current
practices; they simply put the understood requirements in
writing.
Debris
The only change from ML 2002-10 regarding dump receipts is
a requirement that the name of the dump be included to verify
that the debris was disposed of legally. We already require
this information, so this will not cause any changes in procedure.
Yard
Maintenance
The guidelines now allow for an initial grass cut once every
twelve months if the foreclosure process exceeds one year,
provided that the mortgagee is in compliance with the reasonable
diligence requirement.
This
new provision does not apply to properties in the Denver Home
Ownership Center. The Denver HOC still only allows one initial
cut, regardless of how long the property is in foreclosure.
States that fall under the Denver HOC include Texas, New Mexico,
Colorado, Utah, Wyoming, South Dakota, North Dakota, Montana,
Nebraska, Minnesota, Wisconsin, Iowa, Missouri, Kansas, Oklahoma,
Arkansas, and Louisiana.
Winterization
The new letter clarifies what HUD considers a hot water baseboard
heating system. In addition, the amount of pressure required
to inspect a wet heat, radiant, or hot water baseboard system
for leakage has been changed from 50 psi to 35 psi.
Dry system
winterization allowables increased in about half of the states.
Wet system allowables increased in about three-quarters of
the states. Radiant system allowables were increased to $450
for one unit in all states, and additional unit allowables
for radiant systems were also increased in about three-quarters
of the states.
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