Does HUD allow an extension of the Reasonable Diligence Timeframe to take possession of a foreclosed property?

When a separate legal action is necessary to gain possession following foreclosure, an automatic extension of the Reasonable Diligence Timeframe will be allowed for the actual time necessary to complete the possessory action.
HUD provides this automatic extension if the Mortgagee takes the first legal action to initiate the eviction or possessory action within 30 Days of:
  • the completion of foreclosure proceedings; or
  • the expiration of federal or local restrictions on eviction. 
The additional time needed under applicable federal, state, or local laws to obtain possession of a Property is taken into consideration when evaluating a Mortgagee’s compliance with HUD’s Reasonable Diligence Timeframe. Upon the expiration period associated with the applicable occupancy rights, Mortgagees are expected to proceed promptly with possessory actions.
 
The Mortgagee must document in its Claim Review File any delay in completing foreclosure and all activities performed by the Mortgagee to mitigate and abide by these timeframes. The Mortgagee must maintain a comprehensive audit trail and chronology to support any delay in compliance with the Reasonable Diligence Timeframes.

Where the Mortgagee has submitted a request for an extension of time to the National Servicing Center (NSC) via Extensions and Variances Automated Requests System (EVARS), the Mortgagee must maintain a copy of the NSC’s written response in the Claim Review File.
For automatic extensions, the Mortgagee must reflect these extensions in form HUD-27011 and retain in the Claim Review File documentation supporting those extensions.
 
Additional questions may be directed to the HUD National Servicing Center at (877) 622-8525.

For policy information see Handbook 4000.1 Sections III.A.2.r.ii.(E) & IV.A.1.c. at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

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-04200