The mortgage must provide HUD with the necessary documentation for a partial claim under Section III.A.2.k.v(J) (6) of Manual 4000.1, including a partial debt certificate and a subordinated mortgage registered in the name of the HUD Secretary. This requirement for documentation could be particularly difficult in this context, given the difficulties encountered in obtaining certifications due to the lack of ability to meet personally and the closure of district registration units due to the COVID-19 pandemic. In addition, given the magnitude of the receivables and partial claims expected on NACH, service staff, registrars and HUD could be overwhelmed by the number of partial claims that must be processed at the end of the reduction period. The FHA borrower can use a wide range of methods of communication with the borrower to meet the leniency requirements, including, but not limited, emails, texts, faxes, teleconferences and websites. The initial leniency period can be up to six months and, at the borrower`s request, may be extended by a further period of up to six months. ML 2020-06 specifies that mortgages must approve such requests for an extension. The mortgage letter of credit provides that mortgages may authorize the initial leniency of COVID 19 by October 30, 2020, which should give affected borrowers until that date to make such applications. According to FHA FAQs, COVID-19 Forbearance differs from HUD`s informal and formal indulgence in priority water cases, as COVID-19 is an indulgence: (1) is not a written agreement, (2) can be extended for up to six months at the request of the borrower and (3) can only be offered under the direction of COVID-19 National Emergency. Another important difference between COVID-19`s stand-alone partial claim and the Partial Partial Claim Autonomous Disaster is the priority of the COVID-19 autonomous partial claim in the event of loss mitigation. In the context of the natural disaster, the borrower is required to assess borrowers for a partial default declaration at the end of the additional period if the borrower is not eligible for the Disaster Loan amendment. However, in the context of COVID-19 National Emergency, the COVID-19 Autonomous Partial Claim falls immediately after the COVID-19 Forbearance option, without the service provider first having to assess a borrower in the event of a change. This will be a welcome message for services, as it will allow borrowers who are able to resume regular scheduled payments without having to change the loan or buy back the loan from a Ginnie Mae Pool in order to obtain the loss reduction option.
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