What is the mortgagees liability to HUD, if a borrower pursues rebuilding efforts apart from the voluntary escrow agreement under the Mississippi Homeowner Grant Assistance Program?
A. Per ML 06-16, HUD encourages mortgagees to enter into escrow agreements for repair of properties using MDA grant funds. However, if a borrower elects not to enter into a voluntary escrow agreement, HUD will not hold mortgagees with Opt-In agreements liable if the borrower breaches the MDA covenants and the property is subsequently foreclosed and conveyed to HUD in exchange for a claim for insurance benefits. The mortgagee will be expected to reduce the claim by the cost to repair the property however, HUD will not deny conveyance based on a claim that the title is unmarketable because covenants have been breached nor will HUD predicate the calculation of the repair amount based on added construction costs resulting from the covenants.
Related Questions
- What is the mortgagees liability to HUD, if a borrower pursues rebuilding efforts apart from the voluntary escrow agreement under the Mississippi Homeowner Grant Assistance Program?
- When utilizing a Loan Modification option, can a mortgagee capitalize an escrow advance for Homeowners Association fees?
- When does HUD expect a mortgagee to report an SFB Agreement via the SFDMS?
