HUD Mortgagee Letter 2023-02 — Expansion of the COVID-19 Recovery Loss Mitigation Options

hud-ml-2023-02

HUD ML 2023-02 expands the COVID-19 Recovery Loss Mitigation Options to include all Borrowers in Default or Imminent Default (including Non-Occupant Borrowers), increases the COVID-19 Recovery Partial Claim to 30 percent of UPB, temporarily suspends FHA-HAMP and Standard PFS/DIL options through October 30, 2024, and updates SFDMS reporting.

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source:
  type: regulation
  id: hud-ml-2023-02
  authority: HUD Mortgagee Letter 2023-02 — Expansion of the COVID-19 Recovery Loss Mitigation Options
  description: |
    HUD ML 2023-02 expands the COVID-19 Recovery Loss Mitigation Options to
    include all Borrowers in Default or Imminent Default (including
    Non-Occupant Borrowers), increases the COVID-19 Recovery Partial Claim to
    30 percent of UPB, temporarily suspends FHA-HAMP and Standard PFS/DIL
    options through October 30, 2024, and updates SFDMS reporting.
obligations:
  - id: hud-ml-2023-02-implementation-deadline
    canonical_id: hud-ml-2023-02-implementation-deadline
    section: HUD ML 2023-02 — Effective Date
    description: |
      [LENDER] may implement the COVID-19 Recovery expansion provisions of HUD
      ML 2023-02 immediately, but must implement them no later than April 30,
      2023, where [LENDER] has not sent documents to the Borrower to complete
      any Home Retention Option.
    type: do
    audit_question: Can [LENDER] demonstrate that the ML 2023-02 COVID-19 Recovery expansion provisions were implemented in its loss-mitigation operations no later than April 30, 2023 for all Borrowers where Home Retention Option documents had not yet been sent?
    program_review: Does the program account for the implementation deadline — adopting the COVID-19 Recovery expansion no later than April 30, 2023 where Home Retention Option documents had not yet been sent?
    file_review: Review the loss-mit procedure version history; confirm the Recovery expansion was operational by April 30, 2023 for not-yet-documented Borrowers.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - servicing
      - loss-mitigation
      - covid-19-recovery
      - effective-date
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2023-02 — Effective Date
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-02hsgml.pdf
      snapshot_id: 3ee9efb92171f8b9
      fetched_at: '2026-05-22T19:56:19Z'
      content_hash: sha256:cbea62567c3beecf91b91bb13db6143186ef84817e207e0f7debf6fda293c76c
      paragraph_quote: |-
        The provisions of this ML may be implemented immediately, but must be 
        implemented no later than April 30, 2023, where the Mortgagee has not 
        sent documents to the Borrower to complete any Home Retention Option.
      drafter_attestation: |
        Copied verbatim from snapshot 3ee9efb92171f8b9 (content.txt) at
        2026-05-22T20:00Z. Substring is the Effective Date trigger of
        ML 2023-02.
    promoted_at: '2026-05-22T20:56:10+00:00'
    promoted_from: hud-ml-2023-02-roundb-v1.yaml
  - id: hud-ml-2023-02-recovery-options-end-dates
    canonical_id: hud-ml-2023-02-recovery-options-end-dates
    section: HUD ML 2023-02 — COVID-19 Recovery Option End Dates
    description: |
      [LENDER] may offer the COVID-19 Recovery Options through, but no later
      than, October 30, 2024, and must complete any offered COVID-19 Recovery
      Option no later than February 27, 2025.
    type: do
    audit_question: Can [LENDER] demonstrate that no COVID-19 Recovery Options were offered after October 30, 2024 and that all offered COVID-19 Recovery Options were completed by February 27, 2025?
    program_review: Does the program account for the offer/completion windows — no COVID-19 Recovery Options offered after October 30, 2024 and all offered options completed by February 27, 2025?
    file_review: Spot-check COVID-19 Recovery Options; confirm none was offered after October 30, 2024 and all were completed by February 27, 2025.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - servicing
      - loss-mitigation
      - covid-19-recovery
      - sunset-dates
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2023-02 — Effective Date / Sunset Dates
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-02hsgml.pdf
      snapshot_id: 3ee9efb92171f8b9
      fetched_at: '2026-05-22T19:56:19Z'
      content_hash: sha256:cbea62567c3beecf91b91bb13db6143186ef84817e207e0f7debf6fda293c76c
      paragraph_quote: |-
        The COVID-19 Recovery Options may be offered through, but no later 
        than, October 30, 2024, and completed no later than February 27, 2025.
      drafter_attestation: |
        Copied verbatim from snapshot 3ee9efb92171f8b9 (content.txt) at
        2026-05-22T20:00Z. Substring is the COVID-19 Recovery Options
        sunset-date requirement established in ML 2023-02.
    promoted_at: '2026-05-22T20:56:10+00:00'
    promoted_from: hud-ml-2023-02-roundb-v1.yaml
  - id: hud-ml-2023-02-fha-hamp-suspended
    canonical_id: hud-ml-2023-02-fha-hamp-suspended
    section: HUD ML 2023-02 — FHA-HAMP Temporarily Suspended (III.A.2.k.v(B))
    description: |
      All FHA-HAMP Options are temporarily suspended and [LENDER] must not offer
      them through October 30, 2024. [LENDER] must instead evaluate all
      Borrowers for the COVID-19 Recovery Home Retention Options.
    type: dont
    audit_question: Through October 30, 2024, can [LENDER] demonstrate that no FHA-HAMP Loan Modification, FHA-HAMP Standalone Partial Claim, or FHA-HAMP Combination Loan Modification/Partial Claim was offered to any Borrower, and that every eligible Borrower was instead evaluated for the COVID-19 Recovery Home Retention Options?
    program_review: Does the program account for the FHA-HAMP suspension — offering no FHA-HAMP option through October 30, 2024 and instead evaluating every eligible Borrower for the COVID-19 Recovery Home Retention Options?
    file_review: Spot-check loss-mit files in the suspension window; confirm no FHA-HAMP option was offered and the Borrower was evaluated for COVID-19 Recovery Home Retention Options.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: default_servicing_analyst
    secondary_owner_role: compliance_officer
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-ml
      - fha
      - servicing
      - loss-mitigation
      - fha-hamp
      - suspended
      - promoted
    primary_source:
      tier: 1
      authority: HUD ML 2023-02 — III.A.2.k.v(B)
      source_class: hud-ml-pdf
      source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-02hsgml.pdf
      snapshot_id: 3ee9efb92171f8b9
      fetched_at: '2026-05-22T19:56:19Z'
      content_hash: sha256:cbea62567c3beecf91b91bb13db6143186ef84817e207e0f7debf6fda293c76c
      paragraph_quote: |-
        All FHA-HAMP Options are temporarily suspended and must not be 
        offered through October 30, 2024. Mortgagees must evaluate all Borrowers 
        for the COVID-19 Recovery Home Retention Options.
      drafter_attestation: |
        Copied verbatim from snapshot 3ee9efb92171f8b9 (content.txt) at
        2026-05-22T20:00Z. Substring is the FHA-HAMP suspension
        incorporated into Handbook 4000.1 III.A.2.k.v(B) by ML 2023-02.
    promoted_at: '2026-05-22T20:56:10+00:00'
    promoted_from: hud-ml-2023-02-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-22T20:56:10+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2023-02-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from HUD Mortgagee Letter 2023-02 — Expansion of the COVID-19 Recovery Loss Mitigation Options — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD ML 2023-02 — Effective Date

The provisions of this ML may be implemented immediately, but must be implemented no later than April 30, 2023, where the Mortgagee has not sent documents to the Borrower to complete any Home Retention Option.

Source: HUD ML 2023-02 — Effective Date · source URL · snapshot 3ee9efb92171f8b9

HUD ML 2023-02 — COVID-19 Recovery Option End Dates

The COVID-19 Recovery Options may be offered through, but no later than, October 30, 2024, and completed no later than February 27, 2025.

Source: HUD ML 2023-02 — Effective Date / Sunset Dates · source URL · snapshot 3ee9efb92171f8b9

HUD ML 2023-02 — FHA-HAMP Temporarily Suspended (III.A.2.k.v(B))

All FHA-HAMP Options are temporarily suspended and must not be offered through October 30, 2024. Mortgagees must evaluate all Borrowers for the COVID-19 Recovery Home Retention Options.

Source: HUD ML 2023-02 — III.A.2.k.v(B) · source URL · snapshot 3ee9efb92171f8b9