When a mortgagor has been approved for utilizing a DIL of foreclosure, how much
time does a mortgagee have to complete the DIL?
A DIL of foreclosure must be completed within 90 days of
initiation of the process.
Does
HUD allow $2,000 to pay off second liens when determining if a mortgagor is
eligible for a DIL?
Yes, effective with Mortgagee Letter 2002-13, HUD
increased the mortgagor's DIL of foreclosure consideration to not exceed
$2,000. The funds may be used to pay off junior liens or be paid to the
mortgagor upon vacating the property.
Can
a mortgagee revert from a foreclosure process to the acceptance of a DIL from a
mortgagor?
This is a business decision the mortgagee is to decide based
upon what is stated in the mortgagee's Quality Control Plan.
Does a mortgagee have the ability to accept a DIL of foreclosure when there is
an existing Partial Claim?
Yes, Mortgagee Letter 2000-05, page 37, paragraph E.
Condition of Title, states, "Good and marketable title must be conveyed to
the Secretary. The lender must complete a title search and may be required to
secure release of junior liens and/or endorsements to the title policy. HUD
will not accept title subject to most junior liens including IRS liens.
However, HUD will allow liens securing repayment of Section 235 assistance
payments, partial claim advances and Title I liens."
