Understanding foreclosure

Foreclosure

Questions about foreclosure

Foreclosure should only be considered as a last resort and should not be initiated until all relief options have been exhausted. When foreclosure cannot be avoided, it must be started quickly and prosecuted vigorously to minimize losses to both the mortgagee and HUD.

QUESTION - Will the acceptance of partial payments advance the date of default on a delinquent mortgage?

ANSWER - Yes, the acceptance of partial payments will continue to advance the date of default.

QUESTION - The mortgagor has requested reinstatement figures on a mortgage that the foreclosure has been recorded and the foreclosure sale cannot be rescinded. Since the mortgage was a state financed loan, the mortgagor's ability to reinstate could only be through a Quit Claim Deed from the state finance authority to the mortgagor. Given these circumstances, would the FHA insurance certificate remain effective?

ANSWER - If the foreclosure cannot be rescinded, there is no longer a mortgage and, thus, the mortgagee either files a claim for insurance benefits or advises HUD it will not file a claim. In both cases, insurance terminates.

QUESTION - What action determines a foreclosure has been completed?

ANSWER - Foreclosure is completed when the mortgagee acquires title to the property, the Sheriff or Trustee's deed is recorded and status code 46 is reported to the Single Family Default Monitoring System.