What is mortgagee neglect and why is preventing it important?
HUD defines mortgagee neglect as a failure to inspect, preserve and protect the property, or initiate foreclosure within the required timeframe (including any approved or automatic extensions).
Therefore, if a servicer (through their inspection & preservation partner) does not maintain first time vacant FHA properties in the same condition that they found it in upon FTV and prevent any ensuing damage, the property most likely will not convey to HUD, which may result in financial penalty to the mortgagee and possibly its vendors.
Additional repairs may be evaluated based upon loan indebtedness, health/safety, and investor guidelines. Additionally, the big six (hurricane, tornado, earthquake, flood, fire, and boiler explosions) must also be submitted to insurance carriers and repaired prior to conveyance.
Ensure your partner(s) know the importance of preventing mortgagee neglect. Need help? Call AIM Your Way Nationwide Field Services at 800-776-1815.
To read more, visit my blog; https://aimyourway.com/blog/