HUD Mortgage Letter 08-31: Mortgagee Responsibility:
Protect Your Investment
“Mortgagees should preserve and protect properties securing insured mortgages in accordance with the requirements of 24 CFR 203.377, which provides that “the mortgagee shall take reasonable action to protect and preserve such security property when it is determined, or should have been determined, to be vacant or abandoned until its conveyance to the Secretary, if such action does not constitute an illegal trespass. In the event that a property securing a FHA mortgage is conveyed damaged to the Secretary without prior approval, the Department may, at its discretion, require the property to be re-conveyed or may require a reduction to the claim proceeds for the greater of the insurance recovery or HUD’s estimate of the cost of repairing the damage".
"Generally, the more diligent a Mortgagee is in completing timely foreclosure and conveying a property, the lower the expenditure for preservation and protection will be. A Mortgagee may use any individual or firm to perform preservation and protection services on properties securing FHA-insured mortgages.”
“Vacant and abandoned properties are potential targets for vandalism, weather damage and criminal activity. Additionally, they present an attractive nuisance that poses a hazard to children and others who may be injured. To ensure the preservation of the mortgage collateral and lessen the negative community impact of vacant properties, Mortgagees must conduct regular property inspections…” HUD, 2008 Update.
"Generally, the more diligent a Mortgagee is in completing timely foreclosure and conveying a property, the lower the expenditure for preservation and protection will be. A Mortgagee may use any individual or firm to perform preservation and protection services on properties securing FHA-insured mortgages.”
“Vacant and abandoned properties are potential targets for vandalism, weather damage and criminal activity. Additionally, they present an attractive nuisance that poses a hazard to children and others who may be injured. To ensure the preservation of the mortgage collateral and lessen the negative community impact of vacant properties, Mortgagees must conduct regular property inspections…” HUD, 2008 Update.