WAIS Document Retrieval[Code of Federal Regulations]
[Title 24, Volume 2, Parts 200 to 499]
[Revised as of April 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR203.370]

[Page 194-195]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents
 
               Subpart B--Contract Rights and Obligations
 
Sec. 203.370  Pre-foreclosure sales.

    (a) General. HUD will pay FHA insurance benefits to mortgagees in 
cases where, in accordance with all regulations and procedures 
applicable to pre-foreclosure sales, the mortgaged property is sold by 
the mortgagor, after default and prior to foreclosure, at its current 
fair market value (less adjustments as the Commissioner may deem 
appropriate) but for less than the mortgage loan amount currently 
outstanding.
    (b) Notification of mortgagor. The mortgagee shall give notice, 
according to prescribed procedures, of the opportunity to be considered 
for the pre-foreclosure sale procedure to each mortgagor in default. All 
notices to mortgagors must be in an accessible format, if requested, or 
if required by the person's known disability, as required by 24 CFR part 
9.
    (c) Eligibility for the Pre-foreclosure Sale Procedure. In order to 
be considered for the pre-foreclosure sale procedure, a mortgagor:
    (1) Must be an owner occupant in a single family residence that is 
security for a mortgage insured under this part, unless otherwise 
prescribed by the Secretary.
    (2) Must have an account in default, for such period as determined 
by the Secretary, which default is the result of an adverse and 
unavoidable financial situation.
    (3) Must have, at the time application is made to pursue a pre-
foreclosure sale, a mortgaged property whose current fair market value, 
compared to the amount needed to discharge the mortgage, meets the 
criterion established by the Secretary, unless a variance is granted by 
the Secretary.

[[Page 195]]

    (4) Must have received homeownership counseling, as defined by the 
Secretary, and have executed a certification to that effect.

[59 FR 50144, Sept. 30, 1994, as amended at 61 FR 35018, July 3, 1996]



