FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Claim Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025)

FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Claim Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025)

b. Claim Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025) A Mortgagee participating in HUD’s SFLS Program or assigning a Mortgage to HUD under the Indian Land or Hawaiian Home Lands programs may submit a claim under Claim Type 02. i. Hawaiian Home Lands Mortgages (Section 247 Mortgages) Claims The Mortgagee may assign to HUD Mortgages in Default that are insured under Section 247 of the National Housing Act and file claims for mortgage insurance benefits. (A) Computation of Interest HUD will pay mortgage note interest accrued and unpaid at the time of assignment. HUD will pay debenture interest on the net claim amount, excluding mortgage note interest, from the date of assignment to the date of claim payment. If the Mortgagee fails to meet HUD’s time requirement to submit the claim, HUD will notify the Mortgagee of the date of curtailment to be entered in form HUD- 27011. (B) Computation of Claims The Mortgagee may claim up to 100 percent of the unpaid principal balance, plus allowable costs and debenture interest. HUD will reimburse the Mortgagee for reasonable and customary costs associated with the assignment as follows. (1) Allowable Costs The Mortgagee may claim reimbursement for: • fees paid to recorders of deeds or public trustees; • costs required by law; • property and preservation costs performed in accordance with HUD guidance before the date of assignment; and • other fees and costs necessarily incurred and are customary in the area. (2) Disallowable Costs The Mortgagee may not claim reimbursement for the following fees and costs: • fees and costs in excess of reasonable and customary fees and costs and lacking documentation supporting the amount claimed; • fees and costs unnecessary for the protection, acquisition, or conveyance of the Property, such as courier services, document retrieval, express mail, or property inspection by attorneys; IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1600 Last Revised: 11/26/2025 • Mortgagee’s overhead items such as postage, telephone, duplication, or collection services; and • costs for title policies. (C) Submission of Claim Form Parts to HUD for Hawaiian Home Lands Mortgages The Mortgagee may only file a claim after: • the Mortgagee has notified the Department of Hawaiian Home Lands (DHHL) of the Borrower’s Default by letter by the 90th Day of Delinquency; • the Borrower’s Default has remained uncured for 180 Days; • the Mortgagee has met all regulatory program requirements, including the Interview and required loss mitigation evaluation; and • HUD has issued the assignment acceptance letter to the Mortgagee via P260. The Mortgagee must submit form HUD-27011 to HUD via EDI or FHA Catalyst. For EDI submissions, the Mortgagee must submit Parts A and B simultaneously. For FHA Catalyst submissions, the Mortgagee must submit Parts A, B, C, D, and E. The Mortgagee must retain copies of all Parts of form HUD-27011 in the Claim File. ii. Insured Mortgages on Indian Land (Section 248 Mortgages) Claims With HUD approval, the Mortgagee may assign to HUD Mortgages that are in Default and are insured under Section 248 of the National Housing Act and file claims for mortgage insurance benefits. (A) Computation of Interest HUD will pay mortgage note interest accrued and unpaid at the time of assignment. HUD will pay debenture interest on the net claim amount, excluding mortgage note interest, from the date of assignment to the date of claim payment, unless interest is curtailed. (B) Computation of Claim The Mortgagee may claim up to 100 percent of the unpaid principal balance, plus allowable costs and debenture interest. HUD will reimburse the Mortgagee for reasonable and customary costs associated with the assignment as follows. (1) Allowable Costs The Mortgagee may claim reimbursement for: • fees paid to recorders of deeds or public trustees; • costs required by law; IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1601 Last Revised: 11/26/2025 • property and preservation costs performed in accordance with HUD guidance before the date of assignment; and • other fees and costs necessarily incurred and are customary in the area. (2) Disallowable Costs The Mortgagee may not claim reimbursement for the following: • fees and costs in excess of reasonable and customary fees and costs and lacking documentation supporting the amount claimed; • fees and costs unnecessary for the protection, acquisition, or conveyance of the Property, such as courier services, document retrieval, express mail, or property inspection by attorneys; • Mortgagee’s overhead items such as postage, telephone, duplication, or collection services; and • costs for title policies. (C) Submission of Claim Form Parts for Section 248 Mortgages (1) Submission of Claim Form Parts to HUD The Mortgagee must submit form HUD-27011 to HUD via EDI or FHA Catalyst. For EDI submissions, the Mortgagee must submit Parts A and B simultaneously. For FHA Catalyst submissions, the Mortgagee must submit Parts A, B, C, D, and E. The Mortgagee must retain copies of all Parts of the form HUD-27011 in the Claim File. (2) Submission of Claim Form Parts as Part of Request for Title Approval At the time the Mortgagee files its claim, the Mortgagee must send to HUD’s Loan Servicing Contractor: • copies of Parts A and B; • a copy of the original Mortgage; • a copy of the original Note with endorsement; • a copy of assignment to HUD; • copies of all intervening assignments; • the Mortgagee’s original title policy evidencing the Mortgage’s first lien position; • a copy of Part D; • a copy of the Title Submission Certificate; • the original of all hazard insurance policies and a copy of the notice to the insurance carrier requesting that HUD be named beneficiary in the Mortgagee clause; • documentation of the last tax bill paid; • all payment records and, if capitalization method is used, a worksheet showing allocation of payments per mortgage terms; IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1602 Last Revised: 11/26/2025 • a copy of the buydown agreement, if any, and all documents which relate to the payment amount or application of the payments; • a copy of HUD’s letter approving assignment of a damaged Property under 24 CFR § 203.379(a), if applicable; • the Mortgagee’s certificate that the conditions of 24 CFR § 203.379(a)(2), relating to fire damage, have been met, if applicable; • documentation showing that the requirements of 24 CFR § 203.604 have been met; • a statement relating to title defects if 24 CFR § 203.390 applies; and • for Section 235 Mortgages, the following documentation, if not otherwise provided to HUD: o the last two recertifications of family income and composition; o employment verifications; o a Notice of Suspension, Termination and Reinstatement of Assistance Payments Contract, if applicable; and o if the case is subject to Section 235 recapture of assistance payments, the total dollar amount of assistance applied to the account through the date of assignment. iii. Single Family Loan Sales Claims The SFLS Program is a program through which participating Mortgagees may file assignment claims for insurance benefits. SFLS claims are only authorized in connection with the execution of a Participating Servicer Agreement (PSA) between HUD and the Mortgagee for an identified Distressed Asset Stabilization Program (DASP) sale, which is the sale through which HUD will dispose of the asset after payment of the claim. The SFLS claim is governed by the specific terms of the PSA for the specific DASP sale identified in the PSA. (A) Claim Submission Process The Mortgagee must follow the initial claim submission and claim submission report procedures set forth in the PSA. Upon the Mortgagee’s compliance with these procedures, HUD will enter an SFLS Claim Identification Date in the claims processing system. On the business day after the award of the pools of Mortgages, HUD will enter a list of awarded Mortgages (Award Report) in the claims processing system. For Mortgages with an SFLS Claim Identification Date and that are included in the Award Report, the Mortgagee may submit assignment claims until the Claims Cut-off Date noted on Schedule I of the PSA. The Mortgagee may only submit assignment claims for eligible mortgages as defined in the PSA. IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1603 Last Revised: 11/26/2025 For Mortgages that are not awarded in the sale, the Mortgagee may submit insurance claims under CWCOT procedures and as further described in the PSA. (B) Submission of Claim Form Parts to HUD for SFLS (1) To HUD The Mortgagee must submit Part A and Part B to HUD headquarters via EDI or FHA Catalyst. When submitting via FHA Catalyst, the Mortgagee must also submit Parts C, D, and E. (2) To P260 The Mortgagee must upload into P260: • a copy of Parts A, B, C, D, and E; • documentation of the last tax bills paid to each taxing authority; and • any supporting documentation required by the PSA.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Claim Type 02 - Assignment or Single Family Loan Sale Program (07/01/2025) · source URL · snapshot 8c03836f77f317e1