Protecting Tenants at Foreclosure Act: Guidance on Notification Responsibilities Under the Act With Respect to Occupied Conveyance, 66385-66386 [2010-27309]
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Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices
The notice providing information
regarding the application process,
funding criteria and eligibility
requirements can be found using the
Department of Housing and Urban
Development agency link on the
Grants.gov/Find Web site at https://
www.grants.gov/search/agency.do. A
link to Grants.gov is also available on
the HUD Web site at https://
www.hud.gov/offices/adm/grants/
fundsavail.cfm. The Catalogue of
Federal Domestic Assistance (CFDA)
number for the HCV–FSS Program is
14.871. Applications must be submitted
electronically through Grants.gov.
FOR FURTHER INFORMATION CONTACT:
Questions regarding specific program
requirements should be directed to the
agency contact identified in the program
NOFA. Program staff will not be
available to provide guidance on how to
prepare the application. Questions
regarding the 2010 General Section
should be directed to the Office of
Grants Management and Oversight at
(202) 708–0667 or the NOFA
Information Center at 800–HUD–8929
(toll free). Persons with hearing or
speech impairments may access these
numbers via TTY by calling the Federal
Information Relay Service at 800–877–
8339.
Dated: October 22, 2010.
Barbara S. Dorf,
Director, Office of Departmental Grants
Management and Oversight, Office of the
Chief of the Human Capital Officer.
[FR Doc. 2010–27307 Filed 10–27–10; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5415–N–31]
Homeless Management Information
System (HMIS) data collection,
reporting and research, including the
Annual Homeless Assessment Report
(AHAR) TA activities; and
approximately $1.2 million under the
American Recovery and Reinvestment
Act for Homelessness Prevention and
Rapid Re-Housing Program (HPRP) TA
activities. Carried over or recaptured
funds from previous fiscal years, if
available, may be added to this amount.
The SNAPS–TA NOFA providing
information regarding the application
process, funding criteria and eligibility
requirements can be found using the
Department of Housing and Urban
Development agency link on the
Grants.gov/Find Web site at https://
www.grants.gov/search/agency.do. A
link to Grants.gov is also available on
the HUD Web site at https://
www.hud.gov/offices/adm/grants/
fundsavail.cfm. The Catalogue of
Federal Domestic Assistance (CFDA)
numbers for the SNAPS–TA are: 14.261
McKinney-Vento Homeless Technical
Assistance and 14.262 HPRP Technical
Assistance. Applications must be
submitted electronically through
Grants.gov.
FOR FURTHER INFORMATION CONTACT:
Questions regarding specific program
requirements should be directed to the
agency contact identified in the program
NOFA. Questions regarding the 2010
General Section should be directed to
the Office of Departmental Grants
Management and Oversight at 202–708–
0667 (this is not a toll-free number) or
the NOFA Information Center at 1–800–
HUD–8929 (toll-free). Persons with
hearing or speech impairments may
access these numbers via TTY by calling
the Federal Information Relay Service at
1–800–877–8339.
Notice of Availability: Notice of
Funding Availability (NOFA) for Fiscal
Year 2010; Special Needs Assistance
Programs (SNAPS) Technical
Assistance; Request for Qualifications
Dated: October 22, 2010.
Barbara S. Dorf,
Director, Office of Departmental Grants
Management and Oversight, Office of the
Chief of the Human Capital Officer.
Office of the Chief of the
Human Capital Officer, HUD.
ACTION: Notice.
[FR Doc. 2010–27308 Filed 10–27–10; 8:45 am]
AGENCY:
HUD announces the
availability of the applicant information,
deadline information, and other
requirements for the Fiscal Year (FY)
2010 Special Needs Assistance
Programs Technical Assistance
(SNAPS–TA) Program NOFA. The
SNAPS–TA NOFA makes available up
to $11.1 million for technical assistance;
approximately $9.9 million under HUD
McKinney-Vento Technical Assistance
for homeless assistance programs,
SUMMARY:
emcdonald on DSK2BSOYB1PROD with NOTICES
BILLING CODE 4210–67–P
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Jkt 223001
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket Number FR–5427–N–01]
Protecting Tenants at Foreclosure Act:
Guidance on Notification
Responsibilities Under the Act With
Respect to Occupied Conveyance
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, HUD.
AGENCY:
PO 00000
Frm 00039
Fmt 4703
Sfmt 4703
ACTION:
66385
Notice.
This notice provides
additional guidance on the notice,
entitled ‘‘Protecting Tenants at
Foreclosure: Notice of Responsibilities
Placed on Immediate Successors in
Interest Pursuant to Foreclosure of
Residential Property,’’ published in the
Federal Register on June 24, 2009.
Specifically, today’s notice advises on
the relationship between the Federal
Housing Administration’s (FHA’s)
current regulations on occupied
conveyance and the protections for
existing tenants under the Protecting
Tenants at Foreclosure Act of 2009
(PTFA). FHA’s existing regulations
provide that in cases where the
Secretary will be accepting conveyance
of an occupied property because of
foreclosure of an FHA mortgage, the
occupant is entitled to a 60-to-90 day
notice prior to the date the mortgagee
expects to acquire title to the property
with an ability to obtain permission for
continued occupancy from HUD only
upon request and meeting specified
conditions. The PTFA, on the other
hand, provides that after foreclosure on
an occupied property secured by a
federally-related mortgage loan, any
immediate successor in interest to the
foreclosure must provide a tenant
occupying the property under a bona
fide lease with a minimum of at least 90
days advance notice before requiring the
tenant to vacate the property.
Additionally, the successor in interest to
the foreclosure takes subject to any
remaining term on the bona fide lease.
Because there may be some confusion
about the interplay between these two
different notices, HUD issues this
interpretive notice.
FOR FURTHER INFORMATION CONTACT:
Vance Morris, Director, Office of Single
Family Asset Management, Office of
Housing, Department of Housing and
Urban Development, 451 7th Street,
SW., Room 9172, Washington, DC
20410–8000; telephone number 202–
708–1672 (this is not a toll-free
number). Persons with hearing or
speech challenges may access this
number through TTY by calling the tollfree Federal Information Relay Service
at 800–877–8339.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background of PTFA
The Protecting Tenants at Foreclosure
Act of 2009, Title VII of the Helping
Families Save Their Homes Act of 2009
(Pub. L. 111–22, approved May 20,
2009) (codified at 12 U.S.C. 5220 note),
requires that any immediate successor
in interest take a foreclosed residential
property subject to the existing lease
E:\FR\FM\28OCN1.SGM
28OCN1
emcdonald on DSK2BSOYB1PROD with NOTICES
66386
Federal Register / Vol. 75, No. 208 / Thursday, October 28, 2010 / Notices
and provide tenants residing in the
property with notice to vacate at least 90
days in advance of the date by which
the successor, generally, the purchaser,
seeks to have the tenants vacate the
property. Except where the purchaser
will occupy the property as the primary
residence, the term of any bona fide
lease entered into before the notice of
foreclosure and extending beyond 90
days also remains in effect. The PTFA
was enacted during a period when
unprecedented numbers of foreclosures
were occurring across the country.
Often, tenants residing as leaseholders
in residential properties become
collateral victims in addition to
homeowners when foreclosures occur,
and are forced to vacate their
leaseholds, often with minimal notice.
The PTFA ensures that tenants receive
appropriate notice of foreclosure and are
not abruptly displaced.
Sections 702 and 703 of PTFA define
the scope of PTFA’s coverage over
residential properties. The Section 702
requirements provide tenants with at
least 90 days’ advance notice to vacate
and to preserve the term of any bona
fide lease apply to foreclosures on all
Federally related mortgage loans or on
any dwelling or residential real
property. Section 703 makes conforming
changes consistent with the Section 702
requirements to the Section 8 rental
voucher assistance provisions of the
United States Housing Act of 1937 (1937
Act). The protections provided by PTFA
sunset on December 31, 2014.
Section 1484 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (Pub. L. 111–203, approved July 21,
2010) amended PTFA, and extended the
PTFA protections to December 31, 2014.
Section 1484 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act also defined when ‘‘date of notice of
foreclosure’’ occurs. Section 1484
provides in relevant part as follows: ‘‘the
date of a notice of foreclosure shall be
deemed to be the date on which
complete title to a property is
transferred to a successor entity or
person as a result of an order of a court
or pursuant to provisions in a mortgage,
deed of trust, or security deed.
To fall under the Act, a bona fide
lease must be entered into prior to the
date of the notice of foreclosure, which
is defined as ‘‘the date on which
complete title to a property has been
transferred to a successor entity or
person as a result of an order of a court
or pursuant to the provisions in a
mortgage, deed of trust, or security
deed.’’ A bona fide lease is one in
which: (1) The mortgagor or the child,
spouse, or parent of the mortgagor under
the contract is not the tenant; (2) the
VerDate Mar<15>2010
16:13 Oct 27, 2010
Jkt 223001
lease or tenancy was the result of an
arms-length transaction; and (3) the
lease or tenancy requires the receipt of
rent that is not substantially less than
fair market rent for the property or the
unit’s rent is reduced or subsidized due
to a Federal, State, or local subsidy. The
requirements of the PTFA apply with
respect to properties secured by FHAinsured mortgages as well as those in
the Section 8 program.
The notice that HUD published on
June 24, 2009, addressed the general
applicability of PTFA protections to
HUD programs. This notice addresses
the interplay of the PTFA notice
requirements with the notice
requirements of FHA’s occupied
conveyance regulations.
II. FHA’s Occupied Conveyance and
Claims Regulations
Upon default of an FHA-insured
mortgage, the mortgagee must engage in
loss mitigation for the purpose of
providing an alternative to foreclosure.
Should such loss mitigation efforts be
unsuccessful, the mortgagee will
generally foreclose and convey the
property to HUD in exchange for an
FHA mortgage insurance claim. HUD
generally requires the mortgagee to
convey the property unoccupied, but in
certain circumstances, as described in
HUD’s occupied conveyance regulations
at 24 CFR 203.670–203.681, HUD will
accept the property occupied. In cases
where the regulations would not permit
the occupied conveyance of the
property, the mortgagee must evict the
occupant before conveying the property
to HUD. Various laws, usually state or
local, but now also PTFA, affect eviction
procedures and the length of time it
takes to evict. HUD’s claims regulations
at 24 CFR 203.356(b) provide that the
mortgagee must exercise ‘‘reasonable
diligence’’ in prosecuting the foreclosure
proceedings to completing and in
acquiring title to and possession of the
property. (Failure to foreclose and evict
in accordance with this reasonable
diligence time frame could lead to
curtailment of debenture interest on the
mortgagee’s FHA insurance claim as
described in section 203.402(k) of the
regulations.) HUD publishes state-bystate reasonable diligence time frames
by Mortgagee Letter. Most recently,
Mortgagee Letter 2005–30 provided that
an automatic extension of the
reasonable diligence time frame will be
allowed for the actual time necessary to
complete the possessory action
provided that the mortgagee begins such
action promptly. Therefore, HUD
regulations and Mortgagee Letters
already provide mortgagees the
additional time they may need to evict
PO 00000
Frm 00040
Fmt 4703
Sfmt 9990
under the PTFA, i.e., in many cases at
least an additional 90 days. As
mortgagees may have been confused
about the interaction between the PTFA
and the occupied conveyance
regulations, this Notice serves to
confirm that: (1) HUD expects
mortgagees to comply with the PTFA;
and (2) the additional time needed to
evict an occupant pursuant to the PTFA
is automatically included in the
reasonable diligence time frame.
Mortgagees should follow the
procedures below:
1. The mortgagee should follow
HUD’s standard occupied conveyance
procedures by sending out the standard
occupied conveyance letters to the
occupant 60–90 days before the
mortgagee expects to acquire title.
2. If HUD (through its contractors)
grants occupied conveyance, the
mortgagee shall convey the property
occupied under HUD’s normal occupied
conveyance procedures.
3. If HUD denies occupied
conveyance, the mortgagee should
determine whether the PTFA is
applicable (e.g., whether there is a bona
fide lease or tenancy, etc.).
4. In cases where the mortgagee
determines that the PTFA is applicable,
the mortgagee must follow the PTFA
before evicting the occupant. The
additional time needed under the PTFA
to evict the occupant is automatically
added to the reasonable diligence time
frame. The mortgagee must retain
documentation in the claim file to
evidence the applicability of the PTFA
and the additional time needed to
comply with the PTFA.
5. In cases where the occupant would
have the right under the PTFA to remain
in the property for more than 12 months
after the foreclosure (e.g., under the
terms of a bona fide lease under section
702(a)(2)(A) of the PTFA), the mortgagee
may contact the Mortgagee Compliance
Manager for additional instructions.
In addition to this notice, FHA will
issue additional guidance to FHAapproved mortgages.
Dated: October 22, 2010.
David H. Stevens,
Assistant Secretary for Housing—Federal
Housing Commissioner.
[FR Doc. 2010–27309 Filed 10–27–10; 8:45 am]
BILLING CODE 4210–67–P
E:\FR\FM\28OCN1.SGM
28OCN1
Agencies
[Federal Register Volume 75, Number 208 (Thursday, October 28, 2010)]
[Notices]
[Pages 66385-66386]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27309]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket Number FR-5427-N-01]
Protecting Tenants at Foreclosure Act: Guidance on Notification
Responsibilities Under the Act With Respect to Occupied Conveyance
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice provides additional guidance on the notice,
entitled ``Protecting Tenants at Foreclosure: Notice of
Responsibilities Placed on Immediate Successors in Interest Pursuant to
Foreclosure of Residential Property,'' published in the Federal
Register on June 24, 2009. Specifically, today's notice advises on the
relationship between the Federal Housing Administration's (FHA's)
current regulations on occupied conveyance and the protections for
existing tenants under the Protecting Tenants at Foreclosure Act of
2009 (PTFA). FHA's existing regulations provide that in cases where the
Secretary will be accepting conveyance of an occupied property because
of foreclosure of an FHA mortgage, the occupant is entitled to a 60-to-
90 day notice prior to the date the mortgagee expects to acquire title
to the property with an ability to obtain permission for continued
occupancy from HUD only upon request and meeting specified conditions.
The PTFA, on the other hand, provides that after foreclosure on an
occupied property secured by a federally-related mortgage loan, any
immediate successor in interest to the foreclosure must provide a
tenant occupying the property under a bona fide lease with a minimum of
at least 90 days advance notice before requiring the tenant to vacate
the property. Additionally, the successor in interest to the
foreclosure takes subject to any remaining term on the bona fide lease.
Because there may be some confusion about the interplay between these
two different notices, HUD issues this interpretive notice.
FOR FURTHER INFORMATION CONTACT: Vance Morris, Director, Office of
Single Family Asset Management, Office of Housing, Department of
Housing and Urban Development, 451 7th Street, SW., Room 9172,
Washington, DC 20410-8000; telephone number 202-708-1672 (this is not a
toll-free number). Persons with hearing or speech challenges may access
this number through TTY by calling the toll-free Federal Information
Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background of PTFA
The Protecting Tenants at Foreclosure Act of 2009, Title VII of the
Helping Families Save Their Homes Act of 2009 (Pub. L. 111-22, approved
May 20, 2009) (codified at 12 U.S.C. 5220 note), requires that any
immediate successor in interest take a foreclosed residential property
subject to the existing lease
[[Page 66386]]
and provide tenants residing in the property with notice to vacate at
least 90 days in advance of the date by which the successor, generally,
the purchaser, seeks to have the tenants vacate the property. Except
where the purchaser will occupy the property as the primary residence,
the term of any bona fide lease entered into before the notice of
foreclosure and extending beyond 90 days also remains in effect. The
PTFA was enacted during a period when unprecedented numbers of
foreclosures were occurring across the country. Often, tenants residing
as leaseholders in residential properties become collateral victims in
addition to homeowners when foreclosures occur, and are forced to
vacate their leaseholds, often with minimal notice. The PTFA ensures
that tenants receive appropriate notice of foreclosure and are not
abruptly displaced.
Sections 702 and 703 of PTFA define the scope of PTFA's coverage
over residential properties. The Section 702 requirements provide
tenants with at least 90 days' advance notice to vacate and to preserve
the term of any bona fide lease apply to foreclosures on all Federally
related mortgage loans or on any dwelling or residential real property.
Section 703 makes conforming changes consistent with the Section 702
requirements to the Section 8 rental voucher assistance provisions of
the United States Housing Act of 1937 (1937 Act). The protections
provided by PTFA sunset on December 31, 2014.
Section 1484 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Pub. L. 111-203, approved July 21, 2010) amended PTFA,
and extended the PTFA protections to December 31, 2014. Section 1484 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act also
defined when ``date of notice of foreclosure'' occurs. Section 1484
provides in relevant part as follows: ``the date of a notice of
foreclosure shall be deemed to be the date on which complete title to a
property is transferred to a successor entity or person as a result of
an order of a court or pursuant to provisions in a mortgage, deed of
trust, or security deed.
To fall under the Act, a bona fide lease must be entered into prior
to the date of the notice of foreclosure, which is defined as ``the
date on which complete title to a property has been transferred to a
successor entity or person as a result of an order of a court or
pursuant to the provisions in a mortgage, deed of trust, or security
deed.'' A bona fide lease is one in which: (1) The mortgagor or the
child, spouse, or parent of the mortgagor under the contract is not the
tenant; (2) the lease or tenancy was the result of an arms-length
transaction; and (3) the lease or tenancy requires the receipt of rent
that is not substantially less than fair market rent for the property
or the unit's rent is reduced or subsidized due to a Federal, State, or
local subsidy. The requirements of the PTFA apply with respect to
properties secured by FHA-insured mortgages as well as those in the
Section 8 program.
The notice that HUD published on June 24, 2009, addressed the
general applicability of PTFA protections to HUD programs. This notice
addresses the interplay of the PTFA notice requirements with the notice
requirements of FHA's occupied conveyance regulations.
II. FHA's Occupied Conveyance and Claims Regulations
Upon default of an FHA-insured mortgage, the mortgagee must engage
in loss mitigation for the purpose of providing an alternative to
foreclosure. Should such loss mitigation efforts be unsuccessful, the
mortgagee will generally foreclose and convey the property to HUD in
exchange for an FHA mortgage insurance claim. HUD generally requires
the mortgagee to convey the property unoccupied, but in certain
circumstances, as described in HUD's occupied conveyance regulations at
24 CFR 203.670-203.681, HUD will accept the property occupied. In cases
where the regulations would not permit the occupied conveyance of the
property, the mortgagee must evict the occupant before conveying the
property to HUD. Various laws, usually state or local, but now also
PTFA, affect eviction procedures and the length of time it takes to
evict. HUD's claims regulations at 24 CFR 203.356(b) provide that the
mortgagee must exercise ``reasonable diligence'' in prosecuting the
foreclosure proceedings to completing and in acquiring title to and
possession of the property. (Failure to foreclose and evict in
accordance with this reasonable diligence time frame could lead to
curtailment of debenture interest on the mortgagee's FHA insurance
claim as described in section 203.402(k) of the regulations.) HUD
publishes state-by-state reasonable diligence time frames by Mortgagee
Letter. Most recently, Mortgagee Letter 2005-30 provided that an
automatic extension of the reasonable diligence time frame will be
allowed for the actual time necessary to complete the possessory action
provided that the mortgagee begins such action promptly. Therefore, HUD
regulations and Mortgagee Letters already provide mortgagees the
additional time they may need to evict under the PTFA, i.e., in many
cases at least an additional 90 days. As mortgagees may have been
confused about the interaction between the PTFA and the occupied
conveyance regulations, this Notice serves to confirm that: (1) HUD
expects mortgagees to comply with the PTFA; and (2) the additional time
needed to evict an occupant pursuant to the PTFA is automatically
included in the reasonable diligence time frame.
Mortgagees should follow the procedures below:
1. The mortgagee should follow HUD's standard occupied conveyance
procedures by sending out the standard occupied conveyance letters to
the occupant 60-90 days before the mortgagee expects to acquire title.
2. If HUD (through its contractors) grants occupied conveyance, the
mortgagee shall convey the property occupied under HUD's normal
occupied conveyance procedures.
3. If HUD denies occupied conveyance, the mortgagee should
determine whether the PTFA is applicable (e.g., whether there is a bona
fide lease or tenancy, etc.).
4. In cases where the mortgagee determines that the PTFA is
applicable, the mortgagee must follow the PTFA before evicting the
occupant. The additional time needed under the PTFA to evict the
occupant is automatically added to the reasonable diligence time frame.
The mortgagee must retain documentation in the claim file to evidence
the applicability of the PTFA and the additional time needed to comply
with the PTFA.
5. In cases where the occupant would have the right under the PTFA
to remain in the property for more than 12 months after the foreclosure
(e.g., under the terms of a bona fide lease under section 702(a)(2)(A)
of the PTFA), the mortgagee may contact the Mortgagee Compliance
Manager for additional instructions.
In addition to this notice, FHA will issue additional guidance to
FHA-approved mortgages.
Dated: October 22, 2010.
David H. Stevens,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2010-27309 Filed 10-27-10; 8:45 am]
BILLING CODE 4210-67-P