E-3.3-03, Inspecting Properties Prior to Foreclosure Sale (04/10/2019)

The servicer must ensure that a thorough property inspection is completed before it decides to liquidate the mortgage loan by initiating foreclosure.

When foreclosure proceedings are initiated, the servicer must ensure that a property inspection is completed within 35 days prior to foreclosure sale or in applicable foreclosure actions where there is no foreclosure sale and title is transferred by court order, the estimated court order docket date (if known) for

• all conventional mortgage loans,

• any FHA mortgage loan that cannot be conveyed to FHA,

• all VA mortgage loans for which VA would not establish an “upset price,” and

• any special servicing option RD mortgage loan.

See  D2-2-10, Requirements for Performing Property InspectionsD2-2-10, Requirements for Performing Property Inspections for requirements when a property inspection is needed and A4-2.1-02, Property Inspection Vendor Management and OversightA4-2.1-02, Property Inspection Vendor Management and Oversight for additional requirements for property inspection vendors. The servicer must also follow the procedures in Reimbursement for Property Inspections and Property Preservation Expenses in F-1-05, Expense ReimbursementF-1-05, Expense Reimbursement to submit for reimbursement of associated expenses.