FHA Single Family Housing Policy Handbook 4000.1, III. SERVICING AND LOSS MITIGATION > B. Title II Insured Housing Programs Reverse Mortgages > 1. Servicing of FHA-Insured HECMs — s. Demand Assignment

hud-4000-1-iii-s-demand-assignment

HUD effective date: 04/29/2024 · section III.B.1 · Handbook 4000.1

FHA Single Family Housing Policy Handbook 4000.1, Part III — s. Demand Assignment (04/29/2024).

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Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, III. SERVICING AND LOSS MITIGATION > B. Title II Insured Housing Programs Reverse Mortgages > 1. Servicing of FHA-Insured HECMs — s. Demand Assignment — 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.

FHA Single Family Housing Policy Handbook 4000.1, Part III — s. Demand Assignment (04/29/2024)

Effective 2024-04-29 · publisher's stamp for this provision

s. Demand Assignment (04/29/2024) i. Definition Demand Assignment refers to an assignment option where the Mortgagee chooses to assign a HECM, or a portfolio of HECMs, because the Mortgagee is unable or unwilling to reimburse HUD for payments to the Borrower made by HUD. ii. Standard For cases involving a Mortgagee that fails to make payments to the Borrower, HUD may demand assignment. If the Borrower or Mortgagee notifies HUD that a payment was not received and HUD determines that the Mortgagee cannot or will not make the required payment, HUD will make the payment and proceed with communicating to the Mortgagee that a demand assignment could occur. After HUD makes the necessary payment, HUD may issue a written Demand Letter to the Mortgagee, requiring the Mortgagee to: • resume making payments under the HECM; and • reimburse HUD for the amount of the total payment, with interest from the date of the payment to the date reimbursement is received by HUD. HUD will specify an amount, date of payment, and a per diem interest rate, set in conformance with the Treasury Financial Manual. If the Mortgagee is unable or unwilling to reimburse HUD or resume making payments under the HECM, the Mortgagee may: • submit an assignment request, in accordance with the Optional Assignment requirements, to HUD within 30 Days; • limit the Borrower’s liability to payments actually made to or on behalf of the Borrower and the MIP remitted on the HECM; and • exclude any interest accrued on the HECM from the Borrower’s liability. If the Mortgagee fails to reimburse HUD or assign the HECM within 30 Days of the Demand Letter, the contract of HECM insurance will be terminated. If the contract of insurance is terminated, all payments made by HUD will be secured by the second HECM lien. iii. Required Documentation The Mortgagee must follow the documentation instructions for Optional Assignments.

Source: FHA Single Family Housing Policy Handbook 4000.1, Update 18 (issued 2026-08-12) · source URL · snapshot e1bca3432cf19e09

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