Habitat Loan Purchase Program - Mississippi Home Corporation

ARTICLE V:
LOAN LIQUIDATION PROCEDURES
General:
Servicers should not recommend actions to terminate a mortgage until every reasonable effort has
been made to arrive at some other solution through forbearance, modification, etc. A decision to
recommend foreclosure should be made by the Servicer only after a personal face-to-face interview
with the mortgagor, an inspection of the property, and a complete review of the individual
circumstances surrounding the default. When a Servicer recommends foreclosure to MHC, it must
comment as to why the default cannot be cured by available relief provisions, rather than by
termination of the mortgage through foreclosure.
When the mortgagor displays a disregard for the mortgage obligation, accepted servicing practices
require the Servicer to make prudent recommendations to MHC including liquidation action where
necessary, to protect its investment. Such recommendations are due on or before the due date of the
fourth unpaid installment.
Servicer should actively continue all efforts to cure the default until written approval of the
recommended action has been received from MHC.
If MHC approves the Servicers recommendation for foreclosure, MHC will forward all original
mortgage documents to the Servicer along with the foreclosure approval. Upon written approval of
the foreclosure recommendation, the Servicer is to forward the file to an MHC approved attorney for
foreclosure.
Expense During Foreclosure:
During the foreclosure process, funds in the mortgagor's escrow account may be used to pay hazard
premiums, taxes, and other assessments, which may become due. Should the funds in the mortgagor's
escrow account be inadequate to cover these items, the Servicer shall advance its own funds. The
Servicer shall be responsible for it’s reasonable out-of-pocket expenses incurred and any advances by
Servicer in prosecution of foreclosure or other proceeding.
Bidding Instructions:
The Servicer is required to issue bidding instructions to the attorney conducting the foreclosure sale.
The Servicer must have the bid amount approved in writing by MHC prior to the foreclosure sale.
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