FHA Single Family Housing Policy Handbook 4000.1, IV. CLAIMS AND DISPOSITION > D. Title I Disposition > 1. Property Disposition for Property Improvement Loans — b. Foreclosure by Other Lien Holder

hud-4000-1-iv-b-foreclosure-by-other-lien-holder

HUD effective date: 05/09/2022 · section IV.D.1 · Handbook 4000.1

FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Foreclosure by Other Lien Holder (05/09/2022).

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Verbatim regulatory text (1)

Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, IV. CLAIMS AND DISPOSITION > D. Title I Disposition > 1. Property Disposition for Property Improvement Loans — b. Foreclosure by Other Lien Holder — 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 IV — b. Foreclosure by Other Lien Holder (05/09/2022)

Effective 2022-05-09 · publisher's stamp for this provision

b. Foreclosure by Other Lien Holder (05/09/2022) If another lien holder starts a foreclosure action against the Property that secures a Title I Loan, the Title I Lender must monitor the proceedings and participate as necessary to preserve its rights. HUD does not require that the Title I Lender bid at a foreclosure sale or acquire title to the Property. The Lender may submit a claim if the Title I Loan is in Default and otherwise eligible before, or after, the foreclosure action is completed. If the Title I Lender elects to bid at a foreclosure sale to acquire title to the Property, then the Lender is “proceeding against the loan security” and the requirements outlined above will apply. If the foreclosure action is completed prior to the Title I Lender submitting a claim to HUD, the Lender must determine if excess funds exist after foreclosure, and document that determination in the case binder. If excess funds are available, the Lender must take appropriate action to obtain them. The case binder must contain copies of all notices sent to the Title I Lender and document the Lender’s actions.

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

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Source of record: https://claudeforcompliance.com/regs/hud-4000-1-iv-b-foreclosure-by-other-lien-holder/ · register hud-4000-1-iv-b-foreclosure-by-other-lien-holder · verbatim, source-snapshotted regulator text from the Claude for Compliance corpus. To work from every register at once, download the corpus and follow the methodology.