The Federal Housing Administration (FHA ) has given HECM (home equity conversion mortgage) borrowers more time by extending the deadline for lenders or servicers to submit due and payable notices when HECM borrowers or spouses are delinquent on property taxes or insurance payments.
In Mortgagee Letter 2016-01 issued this week , FHA Principal Deputy Assistant Secretary Ed Golding announced that the deadline has been extended for lenders and servicers until April 17, 2016, to file the due and payment notices in accordance with changes made by the FHA last April. The extra time was added to give servicers more time to pursue loss mitigation options such as an HECM Loss Mitigation Repayment Plan for their delinquent tax and insurance payments, according to FHA.
FHA stated in the original policy announcement last April  that “Mortgagees must inform mortgagors in writing that they have thirty (30) days to respond to a Due and Payable Notice. All Due and Payable Notices sent to mortgagors must reference available loss mitigation options, if any, and inform the mortgagor of his/her ability to sell his/her property or execute a Deed-in-Lieu of foreclosure.”
The original policy statement also requires mortgagees to refer borrowers to a HUD-approved counseling agency before initiating the foreclosure procedure.
This week’s extension of the deadline was the second such extension. Last April, the FHA established a timeline of 180 days from the date the policy was issued (April 23, 2015) to file the notices related to tax & insurance delinquencies. In October 2015 , FHA announced that the deadline was extended until January 18, 2016.
Click here  to read the FHFA’s mortgagee letter announcing the deadline extension.
Click here  to read the FHA’s original policy announcement from April 23, 2015.