FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency Judgments (03/31/2022)
FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency Judgments (03/31/2022).
Verbatim regulatory text
Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency Judgments (03/31/2022) — 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 — t. Deficiency Judgments (03/31/2022)
t. Deficiency Judgments (03/31/2022) Where the mortgaged Property is sold at the foreclosure sale for less than the unpaid balance of the debt, HUD may seek a deficiency Judgment, unless prohibited by the terms of the Mortgage. i. HUD-Required Deficiency Judgments (A) Mortgages Insured on or after March 28, 1988 For Mortgages insured pursuant to Firm Commitments issued on or after March 28, 1988, or pursuant to direct endorsement processing when the Mortgagee’s underwriter signed the credit worksheet on or after March 28, 1988, HUD may require the Mortgagee to pursue a deficiency Judgment. Where HUD requires the Mortgagee to pursue a deficiency Judgment, HUD will provide the Mortgagee with instructions and its estimate of the Fair Market Value (FMV) of the Property, less adjustments. Upon receipt of such notification, the Mortgagee must: • tender a bid at the foreclosure sale in that amount; and • attempt, in accordance with state law, to obtain a deficiency Judgment. (B) Mortgages Insured before March 28, 1988 For Mortgages insured pursuant to Firm Commitments issued before March 28, 1988, or pursuant to direct endorsement processing when the Mortgagee’s underwriter signed the credit worksheet before March 28, 1988, HUD may request the Mortgagee to pursue a deficiency Judgment. ii. Procedures for Claims Without Conveyance of Title Unless specifically requested by FHA, the Mortgagee is not required by FHA to pursue any deficiency Judgments in connection with CWCOT procedures. iii. Assignment of Judgments (A) When Filing a Claim for Insurance Benefits The Mortgagee must assign deficiency Judgments to HUD and transmit the Judgment to HUD no later than 30 Days after the Judgment was obtained if the Mortgagee filed a claim for mortgage insurance benefits. (B) When Not Filing a Claim for Insurance Benefits The Mortgagee may engage in Judgment collection activities if a claim for FHA insurance benefits is not filed. III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages