www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

MORTGAGEE LETTER 96-24
 
May 1, 1996
 
TO:  ALL APPROVED MORTGAGEES
 
ATTENTION:  SINGLE FAMILY SERVICING MANAGERS
 
SUBJECT:  Termination of the Mortgage Assignment Program
 
     Legislation has been passed by the Congress and signed by
the President which contains a provision that terminates the
Mortgage Assignment Program.
 
     HUD will not accept assignment of any mortgage for which an
application was received on or after April 26, 1996.
 
     Therefore, lenders must comply with the following
instructions:
 
     -    Immediately discontinue sending the Lender Assignment
          Packet cover letter (ASGN-2) and the Lender Follow up
          Assignment Packet cover letter (ASGN-5) to borrowers in
          default.
 
     -    Do not process requests for assignment if the
          borrower's application is received on or after the
          above date.  An application for assignment is either a
          letter which requests consideration for assignment or a
          completed Form HUD-92068F, Request for Financial
          Information.
 
     -    All requests for assignment consideration received
          prior to the above date are to be processed to a final
          decision.
 
     -    All "good cause" appeals to apply for assignment
          consideration must be received by the lender before the
          above date.  Borrowers who applied for assignment
          consideration before the above date but missed a
          subsequent time frame, e.g. to present documentation,
          request a conference, etc., may have their appeal for
          continued processing considered under "good cause".
 
                                                                2
 
     -    Borrowers who filed bankruptcy either before or after
          receiving the Lender Assignment Packet Cover Letter
          (ASGN-2) or the Lender Follow up Packet Cover Letter
          (ASGN-5) but did not apply for assignment before the
          above date cannot be considered for assignment.
          Lenders that did not send ASGN-2 or ASGN-5 because a
          borrower had filed bankruptcy with the intention of
          sending the letters when a "lift of stay" was received
          cannot send the letters after the above date.
 
     -    Continue to send the Borrower Information Packet cover
          letter (ASGN-1), with appropriate enclosures, to
          borrowers no earlier than 35 days in default.  If
          possible, please delete references to the Assignment
          Program from the HUD Pamphlet PA-426H, Saving Your
          Home, as indicated below.  A notice will be issued when
          the revised pamphlets are available from the Government
          Printing Office.
 
     Please delete:
 
     -    Q: What are my alternatives?
               Delete the paragraph titled "HUD Assignment"
 
     -    Q: What is the HUD Assignment Program and how does
             someone qualify for it?
               Delete the complete question and response.
 
     -    Q: Should I be aware of anything else?
               In paragraph 4, delete the "HUD's Assignment
               Program or"
 
     Lenders are encouraged to increase their efforts to make
existing relief options available to homeowners in default before
proceeding to foreclosure.  Those options include, but are not
limited to, informal and special forbearance, pre-foreclosure
sale and deed-in-lieu.  Additional guidelines will be issued in
the near future on loss mitigation techniques.
 
     Questions concerning this Mortgagee Letter may be directed
to the local Field Offices.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner