The Department of Housing and Urban Development
plans to release new guidance this year on personal property evictions.
William Collins, mortgagee compliance manager for HUD, spoke at the Mortgage Bankers Association
's servicing conference Thursday in Grapevine, Texas. He said HUD recognizes how sensitive an issue personal property eviction can be and that servicers need some sort of defense when dealing with this issue.
Personal property involves things that a homeowner may have left behind in the home after vacating it, anything from clothes to furniture and other personal belongings. Servicers have said they need more guidance on what they should do with such property.
"We understand it is a problem, and that's why we're changing our guidelines," he said.
The anticipated guidance will estimate a dollar amount that should be spent on storage services for 30 and 60 days. Past that limit, servicers are allowed to convey property.
HUD updated property preservation guidance in a mortgagee letter last year, requiring servicers to remove interior debris of a property and leave it in broom-swept condition. The pending guidance is a followup to last year's mortgagee letter.
"We're getting more personal property complaints than ever before," commented Alan Jaffa, chief executive officer of preservation company Safeguard Properties
. "The issue becomes what is personal property and what is debris?"
HUD does not plan on releasing guidance in response to this question. Both Jaffa and Collins agreed it is ultimately up to the servicer to determine the difference. Marc Hinkle, vice president of loan servicing at PHH Mortgage
and moderator of the panel, said his firm uses common sense to identify debris from personal property.
"If it's a working grandfather clock, it's probably not debris," he said.
HUD said Thursday it plans to release guidance soon concerning other property preservation
issues including the Protecting Tenants at Foreclosure Act. Currently, HUD will not take over properties that are occupied, which leaves the servicer to act as a landlord when a rental property is in foreclosure. The organization is considering changing that standard for tenant-occupied properties with leases exceeding 12 months, but it has not formally decided.
A Federal Housing Administration
representative, who was not formally speaking on the panel, said that properties with leases less than 12 months long will receive a pending acquisition letter under the new guidance. This pending acquisition letter will include cautionary language so that tenants understand they will not be evicted immediately. The FHA will also be ramping up its cash-for-keys efforts, she said. Under such a program, the occupant receives a cash payment in exchange for surrendering the keys and vacating.
Write to Christine Ricciardi
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