Are Home Equity Conversion Mortgage (HECM) borrowers with outstanding HOA/Condo fees eligible for permissive loss mitigation review?

No. HECM loans that are in default due to unpaid Homeowners Association (HOA) or Condominium fees are not eligible for permissive loss mitigation and require submission of a due and payable request regardless of any repayment plan for property taxes and/or hazard insurance premium or active “At Risk Extension".

For additional information see Mortgagee Letter 2015-11 at: https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee         

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-03133