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FEDERAL RESERVE BANK
OF NEW YORK
June 7, 1990
HOME OWNERSHIP COUNSELING NOTICE REQUIREMENTS
UNDER THE HOUSING AND URBAN DEVELOPMENT ACT
To All State Member Banks, and Others Concerned,
in the Second Federal Reserve District:
The Housing and Urban Development Act of 1968 requires certain creditors to notify delin
quent home mortgage borrowers about the availability of home ownership counseling. A lender’s
failure to provide adequate and timely notice could jeopardize the ability of a lender to foreclose
on a delinquent property in a timely manner.
A 1988 amendment to the Act — Section 169 of the Housing and Community Development
Act of 1987 (Pub. L. 100-242, 12 U.S.C. Section 170lx) — expanded the class of creditors subject
to this requirement, from makers of loans insured by the Department of Housing and Urban De
velopment (“HUD”) to the servicers of all home loans, as defined in Section 169, except loans as
sisted by the Farmers Home Administration under Title V of the Housing Act of 1949. Section 169,
which was due to expire on September 30, 1989, has been extended through September 30, 1990.
A home loan as defined in Section 169 includes any loan insured by a mortgage or lien on a
one-family house or unit, or a manufactured home and the lot on which it is situated, where the
house, unit, or manufactured home is the homeowner’s principal residence. Thus, servicers of con
ventional and “second-mortgage” type loans secured by such property, in addition to servicers of
loans insured by HUD or guaranteed by the Department of Veterans Affairs, are subject to the no
tification requirement of the Act.
In order to clarify creditor responsibilities under Section 169, HUD has published a notice in
the F edera l R e g iste r of January 24, 1990 (reprinted on the following pages) that contains general
guidance in the form of questions and answers. In this notice, HUD has changed its definition of
a one-family dwelling (which previously included a dwelling that could be divided into a maximum
of four dwelling units) so as to exclude houses with more than one dwelling unit. Also, HUD has
revised its interpretation with respect to the information that the creditor must send the homeowner
in the notice of counseling availability.
In addition, enclosed is a list of HUD-approved counseling agencies for your general location.
For more detailed information about these requirements, you may contact:
Department of Housing and Urban Development
Secretary-held Mortgages and Counseling Services Branch
451 7th Street, S.W.
Washington, D.C. 20410
Attn: Curtis D. Myron, Branch Chief
Room 9184
(Tel. No. 202-755-6664)
A c o m p le te d ir e c to r y o f H U D -a p p r o v e d h o u sin g c o u n s e lin g a g e n c ie s m a y b e o b ta in e d u p o n
w ritte n re q u e s t to th e ab o v e a d d re ss. U p d a te s o f th e list o f a p p ro v e d c o u n s e lin g a g e n c ie s fo r y o u r
g e n e ra l lo c a tio n m a y b e o b ta in e d b y tele p h o n e re q u e s t to H U D .
Q u e s tio n s re g a rd in g th is m a tte r m a y b e d ire c te d to o u r C o m p lia n c e E x a m in a tio n s D e p a rtm e n t
(T el. N o. 2 1 2 - 7 2 0 - 5 9 1 4 ) .
M arg aret E. B r u sh ,
A ssista n t C h ie f Exam iner.
2
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Office of the Assistant Secretary for
Housing-Federal Housing
Commissioner
[Docket No. N -90-3902; FR -2460-N -01]
Supplement to the Notice to Home
Loan Creditors of Responsfttffftles
Under Federal Law
AGENCY: Office of the Assistant
Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Supplement to the notice to
home loan creditors of responsibilities
under Federal law.
HUD published a Notice on.
May 15,1989 in the Federal
[54
FR 20964) (Notice) which discussed
creditors’ responsibilities under section
169 of the Housing and Community
Development Act of 1987, Public Law
100-242, approved February 5,1986
(section 169). This office has received
many Hwpriries' from creditors regarding
various aspects of the Law, and to
resolve these questions we are
publishing this supplement so that it will
be available to all creditors. (Section 103
expired cn September 30.1989, but it has
now been extended through September
30,1990 by Public Law 101-137,
spprcved November 3 ,1S69.)
There are two changes to the
information contained in the previous
Notice published in the Federal Register.
One change involves the definition of a
"one-family dwelling", which the Notice
defined to include “a dwelling that may
be divided into a maximum of four [4j
dwelling units." After reviewing section
169 and its legislative history, it is
HUB’S view* that a one-family dwelling
doe9 not include houses with more than
one dwelling unit. This is reflected in the
answer to Question 8.
The second change involves the
information which the creditor must
send the homeowner in the notice of
counseling availability. The Notice
implied that specific information on
counseling agencies must be included in
the Notice sent to the homeowner. It has
now been decided that the creditor may,
instead, include In the written Notice of
Default a toll-free number which the
homeowner may call for specific
information. The creditor must ensure
that the telephone line is adequately
staffed. This revised information is
contained in Question 4.
sum m ary:
Register
FOR FURTHER INFORMATION CONTACT:
Robert E. Falkenstein, Jr., Office of
Insured Single Family Housing,
Department of Housing and Urban
Development, 451 Seventh Street SW.,
Washington, DC 20140; telephone (202)
755-6672. (This is not a toll-free
number.)
SUPPLEMENTARY INFORMATION.* In order
to respond to creditor inquiries and to
clarify creditor responsibilities under
section 169, the Office of Housing has
prepared the following questions and
answers as a supplement to the Notice
previously published. HUD has no
explicit statutory rc!e as interpreter of
the scope of section 169, and is
publishing this document as general
guidance only. We note that if a
creditor’s compliance with section 169 is
challenged in court, the ultimate
determination of the adequacy of the
creditor’s notification and the legal
consequences of any noncompliance
will be made by the Court. We also note
that nothing in this information or in
section 1G9 is intended to preclude a
creditor from providing any additional
assistance to defaulting homeowners
that the creditor regards as appropriate.
1. Does the section 169 requirement
that creditors notify delinquent
homeowners of available counseling
apply only if the property secures a
mortgage that is federally insured or
guaranteed?
No. The section 169 notification
requirement applies to all home loans
except those assisted by the Farmers
Home Administration under title V cf
the Housing Act of 1949. Thus, both
conventional mortgages and loans, and
those insured by HUD or guaranteed by
the Department of Veterans Affairs, are
subject to section 169.
2. How soon do notices have to go out
efter a homeowner becomes delinquent?
The statute does not prescribe a time
at which the notice must be sent to the
homeowner. However, since the purpose
of the notice is to help the homeowner
avert foreclosure, it should be sent soon
enough to enable the homeowner to
benefit from the counseling. HUD
recommends that the notice be included
in the creditor’s first communication
with the homeowner regarding the
delinquency.
3. What is the creditor’s obligation
with respect to a future delinquency?
A notice must be sent to every
homeowner every time the homeowmer
becomes delinquent. If the homeowner
3
brings the loan current and becomes
delinquent again, another notice must be
sent.
4. What should be in the notice?
The notice must contain information
on any counseling provided by the
creditor and either the name, address
and telephone number of the HUDapproved counseling agencies near the
homeowner or a cost-free telephone
number at the creditor’s office where the
homeowner can obtain this information.
If the security instrument is insured or
guaranteed by the Department of
Veterans Affairs, the homeowner may
be provided with the address and
telephone number of the Department of
Veterans Affairs Regional Office in the
state in which the homeowner resides
instead of information on the HUDapproved counseling agencies.
It is not necessary that information on
a specific counseling agency be included
in the notice. It is sufficient to advise the
homeowner that counseling assistance
is available and that the homeowmer
should contact the creditor for further
information as long as the creditor
provides the homeowner with a toll free
number and the creditor ensures that the
telephone is adequately staffed.
5. Will HUD be issuing a form for the
notice?
No, HUD will not be issuing a form for
the notice. It is HUD’s view that
sufficient information has been provided
on the Section 169 notice requirement to
enable creditors to prepare the notice.
6. Who should receive the notice?
A homeowner occupying a property
covered by a delinquent loan who has
suffered an involuntary reduction in his
or her income or in the income of
scmecne who contributes to the
homeowner's income. However,
creditors may prefer to send the notice
to ail delinquent homeowners, rather
than attempt to determine the cause of
each delinquency.
7. Are notices required for delinquent
home equity loans?
Yes. Also for delinquent mortgages,
deeds of trust, second liens, and any
other loan secured by the mortgagor’s
principal residence.
However, the notice is not required
property sold under a land sales
contract, since title remains in the seller
until the contract is completed. The
purchaser is not a homeowner until the
completion of the contract.
8. Is the notice required only for a
homeowner of a one-family house?
In addition to a one-family house,
section 169 covers a one-family unit in a
condominium, a membership interest
and occupancy agreement in a
cooperative housing project and a
manufactured home and the lot cn
which the home is situated. The
homeowner must occupy the property as
his or her principal residence.
A loan which is secured by only a
manufactured home (mobile home) unit,
exclusive of a lo t is not covered by the
statute. However, a loan secured by
both the manufactured home and the
site is within the definition of residential
property as set out in section 169.
Accordingly, the owner of a
manufactured home financed by a loan
secured by both the home and lot is
entitled to a section 169 notice.
9. If the notice is sent and the closet
agency is a significant distance from the
homeowner's residence, is the creditor
required to provide counseling?
The statute does not require any
creditor to provide counseling.
10. If a creditor does provide
homeownership counseling, should the
creditor also notify the delinquent
homeowner of the availability of
homeownership counseling by HUDapproved counselors or by the
Department of Veterans Affairs?
Yes.
11. Do creditors have to be HUDapproved to offer homeownership
counseling?
No.
12. Must creditors indicate in the
notice if they do not provide
homeownership counseling?
No.
13. Who is responsible for sending the
section 169 notice—the owner of the
security instrument or the servicer?
Section 169 defines the term
“creditor" as a person that is servicing a
home loan on behalf of itself or another
person or entity. Therefore the servicer
of a loan, not the owner, is required to
provide the notice required by Section
169.
14. Is a bank a creditor under section
169 if it performs specific collection
services for a mortgagee, i.e., receiving
the monthly mortgage payments, and
issuing a monthly or quarterly statement
to the mortgagee?
If the bank merely receives the
mortgage payments for another entity
and does not contact homeowners to
discuss delinquent account, the bank
would not be considered a “servicer’'
and would not be required to send the
Section 169 notice.
15. Should the notice be delivered by
certified mail?
Section 169 does not require delivery
by certified mail. However, the creditor
should be in a position to prove the
notification if the homeowner alleges
noncompliance with section 169.
16. Should the notice list counseling
agencies which are located near the
secured property or near the homeowner
if the creditor’s records indicate that
these are different locations?
Since the homeowner must occupy the
property as his principal residence
before it is required that this notice be
sent, the notice should list counseling
agencies that are located in the vicinity
of the secured property.
17. May counseling agencies charge
for their services?
Counseling agencies may charge for
that portion of the fee which is not
covered by grants and other subsidies
received by the counseling agency.
However. HUD may limit such charges
and place other restrictions on
counseling agencies wishing to remain
HUD-approved. Section 169 does not
require the creditor to assume the cost
of this counseling.
18. ’What is homeownership
counseling?
Homeownership counseling includes
providing information, advice, and
assistance to enable delinquent
homeowners to become current in their
mortgage payments. The counseling is
also designated as housing counseling or
default counseling, and includes every
service and assistance that will help the
homeowner to become current.
Budgeting, money management,
arranging a forbearance agreement or
plan with the bank, lender or servicer,
arranging repayment plans for the
payment of other debts, financial aid
from local government entities, food and
4
clothing from non-profit organizations,
marital and family guidance, all are
included in the homeownership
counseling package delivered by HUDapproved housing counseling agencies.
The intent is to increase the income of
the homeowner, reduce expenses and
payments on installment debts, and
thereby free-up monies for the monthly
mortgage payments.
19. When recommending HUDapproved housing counseling agencies
to the homeowner, should creditors send
the entire state list of HUD-approved
housing counseling agencies, or can
creditors select one or two agencies on
the list near the homeowner?
Creditors should provide the
homeowner with a reasonable number
of choices. The homeowner needs more
than one or two counseling agencies to
choose from. However, the creditor does
not need to provide a statewide listing if
the state is very large and the listing is
lengthy. If there are no HUD-approved
housing counseling agencies near the
delinquent homeowner, the creditor
should provide a list of a reasonable
number of agencies which are nearest to
the homeowner. The delinquent
homeowner may wish to visit those
agencies even though they are some
distances away or may wish, instead, to
discuss the problems over the telephone.
20. Did this Law expire September 30,
1989?
Yes. However, section 169 was
extended through September 30,1990 by
an Act to extend the expiration date of
the Defense Production Act of 1950,
Public Law 101-137, which was signed
by the President on November 3,1989.
21. Who can creditors contact at HUD
for more detailed homeownership
counseling information?
Secretary-Heid & Counseling Services
Branch, Department of Housing and
Urban Development* 451 Seventh Street
SW.—Room 9184, Washington, DC
20410. The telephone is (202) 755-6664.
(This is not a toll-free number.)
Dated: January 8,1990.
Peter Monroe,
Acting General Deputy Assistant Secretary
for Housing—Federal Housing Commissioner.
[FR Doc. 90-1547 Filed 1-23-00; 8:45 am]
BRUNO COOC 4210-27-U
New York, Connecticut, and New Jersey
HUD-Approved Counseling Agencies
STATE OF NEW YORK
HUD-APPROVED COUNSELING AGENCIES
SERVICE AREA: Manhattan
SERVICE AREA: The Bronx
L.E.S. Coalitton- Housing
Development
187-89 Avenue B
New York, NY 10009
{212) 677-4722
South Bronx Action Group, Inc.
384 East 149th Street, Suite 220
Bronx, NY 10455
(212) 993-5869
SERVICE AREA-
Manhattan
New York Hispanic Housing
Coali tion
209 East Third Street
Post Office Box 880
New York, NY 10009
(212) 460-0951
SERVICE AREA:
Brooklyn
,rooklyn Neighborhood Improvement
Associ ati on
648 Washington Avenue
Brooklyn, NY 11238
(718) 622-6026
Commission on Human Rights
Neighborhood Stabi1ization
Program
1368 Fulton St. - 3rd Floor
Brooklyn, NY 11216
(718) 230-3600
Renaissance Development Corp.
489 Rockaway Avenue
Brooklyn, NY 11212
(718) 498-7210
Commission on Human Rights
3442 Fulton Street
Brooklyn, NY 11208
(718) 827-7000
Office of Neighborhood Stabilization
Program
Commission on Human Rights
4101 White Plains Road
Bronx, NY 10460
(212) 798-3542
SERVICE AREA: Suffolk County
Suffolk Housing Services
550 Smithtown-by-Pass, Room 220
Hauppauge, NY 11787
(516) 724-6920
Bellport, Hagerman, East Patchogue
A11iance
1731 Montauk Highway
Bellport, NY 11713
(516) 286-9236 OR 286-9264
Family Service League of
Suffolk County, Inc.
262-4 Kings Plaza
Middle Country Road
Middle Island, NY 11953
(516) 345-2140
Wyandanch Community Development
Corporati on
1527 B. Straight Path
Wyandanch, NY 11798
(516) 643-4786
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STATE OF NEW YORK
SERVICE AREA: Queens
Rockaway Development
A Revitalization Corporation
1931 Mott Avenue, Room 316
Far Rockaway, NY 11691
(718) 471*6040
Orange County Rural Development
Advisory Corporation
233 Greenwich Avenue
Goshen. NY 10924
(914) 294*8336
SERVICE AREA: Westchester County
Elmcor Youth and Adult Activities
107-20 Northern Boulevard
Corona, NY 11368
(718) 651-0096
New Rochelle CAP
95 Lincoln Avenue
m **, PAchelle* NY 10801
(914) 636-3050
City Commission of Human Rights
Neighborhood Stabilization
Program
89-11 161st Street, Room 210
Jamaica, NY 11432
(718) 657-9333
Westchester Residential
Opportunities, Inc.
470 Mamaroneck Avenue
White Plains, NY 10605
(914) 428-4507 or 428-0953
Baisley Park Neighbors
114-0? Guy Brewer Boulevard
Jamaica, NY 11433
(718) 523-3613
Margret Community Corporation
1920 New Haven Avenue
Far Rockaway, NY 11691
(718) 471-3724
Capitol Hill Improvement Corp.
260 Lark Street
Albany, MY 12210
(518) 462-9696
SERVICE AREA: Broome County
Metro-Interfalth Services, Inc.
21 New Street
Binghamton, NY 13903
(607) 772-6766
Pre-rental A Shared-housing
Counseling Services
SERVICE AREAt Cayuga County Area
Cayuga County Homf'lte Development
Corporation
60 Clark Street
Auburn, NY 13021
(315) 253-8451
SERVICE AREA;
Chenango County
Chenango Housing1Improvement
Program, Inc.
99 North Broad Street
Norwich, NY 13815
(607) 334-3867
1/1/9
STATE OF NEW YORK
SERVICE AREA: Oneida County
Consumer Credit Counseling Services
of Hew York, Inc.
502 Bleeker Street
Utica, NY 13501
(315) 797-5366
(Branch Office)
Consumer Credit Counseling Services
of Central New York, Inc.
120 East Washington Street
1006 University Building
Syracuse, NY 13202-4093
(315) 474-6026
(Main Office)
SERVC_E_AlREA_• Cattaraugus County
Eastside Neighborhood Organization
for Development. Inc.
602 Exchange National Bank Building
Clean, NY 14760
(716) 372-0602
SERVICE AREA: Chautauqua County
Chautauqua Opportunities, Inc.
204 Lafayette Street
Jamestown, NY 14701
(716) 488-0766
SERVICE AREA: Onondaga County
SERVICE AREA•
Urban League of Onondaga County,
Inc#, 5°5 E. v ?.vette Street!
Syracuse, NY 13202
Buffalo Urban League
15 East Genessee
Buffalo, NY 14203
(716) 854-7625
)
15)
472-6055
SERVICE AREA:
Rensselaer County
Troy Neighborhood Council, Inc.
415 River Street, Third Floor
Troy, NY 12180
(518) 272-8155
SERVICE AREA: Schenectady County
Erie
County
Fillmore Leroy Area Psesldents, Inc.
(FLARE)
307 Leroy Avenue
Buffalo, NY 14214
(716) 838-6740
SERVICE AREA: Erie County
Better Nelghborhoods, Inc.
975 Albany Street
Schenectady, NY 12307
(518) 372-6469
Housing Assistance Center of
Niagara Frontier
1233 Main Street
Buffalo, NY 14209
(716) 881-2200 Main Office
SERVICE AREA: Sullivan County
SERVICE AREA: Monroe County
Rural Sullivan County Housing
Opportunlties, Inc.
375 Broadway, P.0. Box 1497
Montlcel1o, NY 12701
(914) 794-0348
Housing Council in Monroe County
Area, Inc.
242 Andrews Street
Rochester, NY 14604
(716) 546-3700
Troy Rehabil1tatlon and Improvement
Program, Incorporated
*+15 River Street
P.0* Box 1249
Troy, NY 12181
(518) 272-8289
Monroe County Human Relations
Commission
619 Powers Building
16 West Main Street
Rochester, NY 14614
(716) 454-1050
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STATE OF NEW YORK
REM COUNSELING ONLY
SERVICE AREA: Orleans .County
Housing Development Council of
Orleans County
227 West Avenue
Albfony NY 14411
(7161 589-7037
SERVICE AREA;
Family Service League of Suffolk
County, Inc.
262-4 Kings Plaza, Middle Count
Road
Middle Island, New York 11953
(516) 345-2140
Albany
United Tenants of Albany, Inc.
33 Clinton Avenue
Albany, NY 12207
(518) 436-8997
Community Agency for Senior
Citizens, Inc.
5* Bay Street
Staten Island, New York 10301-2
(718) 9 81-6 222
SERVICE AREA: Rensselaer County
Rensselaer County Community Housing
Resource Board, Inc.
1514 First Street
P.0. Box 255
Rensselaer, NY 12144
(518) 434-1291
SERVICE AREA"
Nassau County
s
SERVICE A R E A ; Towns of Shandaker
O l ive and Woodst
in U l s t e r County
SHARP Committee, Inc.
M ain Street
P tO . Box 362
Phoenicia, NY 12464
(914) 688-5777
Family Service Association of
Nassau County, Inc.
129 Jackson Street
Hempstead, NY 11550
(516) 485-5600
Only offers counseling on
Reverse Equity Mortgage Program
SERVICE AREA; Columbia County
Columbia Preservation Corporation
557 barren Street
Hudson, NY 12534
(518) 828-0066
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STATE OF CONNECTICUT
HUD-APPROVED COUNSELING AGENCIES
Northeastern Connecticut Community
Development Corporation
Post Office Box 156, Route 6
Danielson, CT 06329
(203) 774-7020
Urban League of Greater New Haven
1184 Chapel Street
New Haven, CT 06510
(203) 624-4168
Urban League of Greater Hartford,
Inc „
Housing Department
1229 Albany Avenue
Hartford, CT 06112
(203) 527-0147
STATE OF NEW JERSEY
HUD-APPROYED COUNSELING AGENCIES
SERVICE AREA;
City
of Bayonne
Bayonne Economic Opportunity
Founda t1on
555 Kennedy Boulevard
Bayonne, NJ 07002
(201) 437-7222
(Main Office - Non-Counseling)
SERVICE AREA: Middlesex County
Middlesex County Economic
Opportunities Corporation
341 Georges Road, 2nd Floor
North Brunswick, NJ 08902
(201) 846-6600
(Main Office - Non-Counseling)
SERVICE AREA:
Satellite
A.I.M.S.
334 Stockton Street, #113
Perth Amboy, NJ 08861
(201) 324-1580
SERVICE AREA: Monmouth County
Check Mate Incorporated
649 Mattison Avenue
Asbury Park, NJ 07712
(201) 774-3100
Monmouth County Board of Social
Services
Burlington & Kozlosik Road
Post Office Box 3000
Freehold, NO 07728
(201) 431-7987
SERVICE AREA: Morris County
Morris County Fair Housing Counc
19 Market Street
Post Office Box 773
Morristown, NJ 07960
(201) 533-2975
SERVICE AREA: Union County
Urban League of Union County
272 North Broad Street
Elizabeth, NJ 07203
(201) 351-7200
SERVICE AREA: Passaic County
Paterson Task Force
153-155 Ellison Street
Paterson, NJ 07505
(201) 279-2333
SERVICE AREA: Bergen County
Urban League of Bergen County
106 West Palisade Avenue
Englewood, NJ 07631
(201) 568-4983
SERVICE AREA: Essex County
Urban League of Essex County
3 Williams Street
Newark, NJ 07102
(201) 624-6660
(Counseling Office)
1/ 1/90
STATE OF NEW JERSEY
SERVICE AREA: Essex County
City of East Orange
Housing Consumer Counseling
122 Brighton Avenue
East Orange, NJ 07107
(201) 266-5415 or 266-5444
Urban League of Essex County
744 Broad Street, Suite 307
Newark, NJ 07102
(201) 624-6660
(Main Office - Non-Counseling)
Atlantic Human Resources, Inc.
10 South Tennessee Avenue
Atlantl c Ci ty , NJ 08401
(609) 348-4131
v
Jaycee Housing Counseling, Inc.
1840 South Broadway
Camden, NJ 08104
(609) 541-1000
Ocean Community Economic Action
Now, Inc.
40 Washington Street
Toms River, NJ 03753
(201) 244-5333
Trenton Housing Counseling Services
City Hall Annex - 3rd Floor
319 East State Street
Trenton, NJ 03618
(509) 939-3598
City of Atlantic City
Code Enforcement
1301 Bacharach Boulevard
Atlantic City* NJ 08401
(609) 347-5675
Borough of Clayton
Welfare and Counseling Department
125 N. Delsea Drive
Clayton, NJ 08312
(609) 881-2832
1/1/90
@FedFRASER