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We audited the U.S. Department of Housing and Urban Development’s (HUD) efforts to proactively communicate information related to the coronavirus disease of 2019 (COVID-19) to homeowners with Federal Housing Administration (FHA)-insured mortgages.  We initiated this work based on a U.S. Government Accountability Office report that identified helping borrowers understand the protections available to them as a key challenge and prior audit and evaluation work that found issues related to communication and COVID-19.  Our audit objective was to assess HUD’s communication to homeowners with FHA-insured mortgages through its website, joint website, and other proactive methods about protections, repayment options, loss mitigation options, and responsibilities related to COVID-19.

HUD proactively communicated critical information to homeowners during the COVID-19 pandemic.  However, there are several areas in which HUD could improve its communication.  For example, HUD’s COVID-19 Resources for Homeowners webpage did not (1) clearly present the deadline for requesting forbearance, (2) detail loss mitigation options available after forbearance, and (3) include detailed information for homeowners with reverse mortgages.  Additionally, letters mailed to homeowners may not have been timely for some and did not discuss loss mitigation.  This condition occurred in part because HUD chose to direct certain information to lenders only and relied on them to communicate with borrowers, and because it did not have a strategy for sending letters.  As a result, homeowners may not have been aware of available protections and loss mitigation options.  If HUD addresses the issues identified, it could better serve homeowners through the end of the COVID-19 pandemic and during future disasters and national emergencies.

We recommend that HUD’s Office of Single Family Housing update its COVID-19 Resources for Homeowners webpage to adequately cover key information related to forbearance for forward mortgages, extension periods for reverse mortgages, loss mitigation, and other assistance available.  We also recommend that HUD develop a communication strategy detailing how and when it plans to use websites, letters, and other methods to proactively notify homeowners about relief programs, protections, and loss mitigation options during disasters and national emergencies.

Recommendations

Housing

  •   2023-NY-0001-001-A

    Closed on May 26, 2023

    We recommend that the Deputy Assistant Secretary for Single Family Housing update its COVID-19 Resources for Homeowners webpage to clearly communicate that homeowners who had not previously requested forbearance by September 30, 2021, are eligible to request forbearance from their servicer through the end of the COVID-19 National Emergency.

  •   2023-NY-0001-001-B

    Closed on May 26, 2023

    We recommend that the Deputy Assistant Secretary for Single Family Housing update its COVID-19 Resources for Homeowners webpage to include information on the various COVID-19 loss mitigation options servicers may offer homeowners with FHA-insured forward mortgages who are exiting COVID-19 forbearance.

  •   2023-NY-0001-001-C

    Closed on May 26, 2023

    We recommend that the Deputy Assistant Secretary for Single Family Housing update its COVID-19 Resources for Homeowners webpage to include details about the protections and loss mitigation options available for homeowners with FHA-insured reverse mortgages. This information could include (1) instructions for requesting an extension, (2) a statement notifying homeowners that they should not be charged late fees or penalties, (3) a chart showing the extension periods and related deadlines, and (4) information on the various loss mitigation options available for homeowners with FHA-insured reverse mortgages who are exiting a COVID-19 HECM extension.

  •   2023-NY-0001-001-D

    Closed on May 26, 2023

    We recommend that the Deputy Assistant Secretary for Single Family Housing update its COVID-19 Resources for Homeowners webpage to include relevant information on the U.S. Department of the Treasury’s Homeowner Assistance Fund.

  •   2023-NY-0001-001-E

    Closed on May 26, 2023

    We recommend that the Deputy Assistant Secretary for Single Family Housing work with the Office of Public Affairs, Office of Housing Counseling, and other offices within HUD to develop a detailed communication strategy for how and when it plans to use websites, letters, and other methods to proactively notify homeowners about relief programs, protections, and loss mitigation options during disasters and national emergencies. The strategy could include processes to ensure that (1) key information is provided or made available in a timely manner and kept up-to-date, (2) information is communicated clearly and consistently across mediums, and is linked together when possible, and (3) letters are mailed to struggling homeowners when needed. It could also articulate the methods HUD will use to reach homeowners without internet access.