Exhibit A: GENERAL REQUIREMENTS FOR PROPERTY AND PRESERVATION OF PROPERTIES SECURED BY FHA INSURED MORTGAGES
Damage Due to Failure to Preserve and Protect (Mortgagee Neglect)
HUD will hold the mortgagee liable for property damage or destruction to vacant or abandoned property resulting from the mortgagee‟s failure to take action to preserve and protect the property. This failure to preserve and protect is considered mortgagee neglect. Examples of mortgagee neglect include, but are not limited to, the mortgagee‟s failure to:
- Adequately verify the occupancy status of a property;
- Initiate foreclosure within the required timeframe;
- Obtain timely and accurate property inspections;
- Promptly secure and continue to protect all vacant properties; or
- Promptly notify the MCM of receipt of code violations, demolition notices and/or
take appropriate action.
Mortgagees may use any qualified individual or firm to perform P&P services on properties that were secured by FHA-insured mortgages; however, the mortgagee remains fully responsible to HUD for its actions and the actions of its agents, individuals and firms that performed such services.