The Most Important Notices That Have NEVER Been Sent in a Foreclosure Case (SCRA)

November 20, 2006

Mortgagee Letter 2006-28

TO:                             ALL APPROVED MORTGAGEES

ATTENTION:           Single Family Servicing Managers

SUBJECT:                            Mortgage and Foreclosure Rights of Servicemembers under the Servicemembers Civil Relief Act (SCRA)

This Mortgagee Letter provides information regarding a new legal requirement to notify homeowners in default of the mortgage and foreclosure rights of servicemembers and their dependents under the Servicemembers Civil Relief Act (SCRA).  It also provides guidance regarding the implementation of SCRA requirements in servicing FHA-insured mortgages.  This guidance supersedes prior Mortgagee letters ML 2003-04, Soldiers’ and Sailors’ Civil Relief Act and ML 01-22, The Effect of the Soldiers’ and Sailors’ Civil Relief Act of 1940 on FHA Insured Mortgages.  However, the guidance provided in ML 91-20, Effect of the Soldiers’ and Sailors’ Civil Relief Act of 1940 on FHA Insured Mortgages remains valid with respect to the calculation of Section 235 subsidy.

Section 688 of the National Defense Authorization Act for Fiscal Year 2006 (public law

109-163, enacted January 6, 2006) amended the required content of notifications of homeownership counseling availability under section 106(c)(5)(A)(ii) of the Housing and Urban Development Act (12 U.S.C. 1701x(c)(5)(A)(ii)) and directed HUD to develop and disseminate a format for the required notice.

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