FHA Single Family Housing Policy Handbook 4000.1, Part IV — c. Claim Type 05 - Supplemental Claims/Remittances (03/01/2023)

FHA Single Family Housing Policy Handbook 4000.1, Part IV — c. Claim Type 05 - Supplemental Claims/Remittances (03/01/2023)

c. Claim Type 05 - Supplemental Claims/Remittances (03/01/2023) The Mortgagee may submit a supplemental claim under Claim Type 05. i. Definition A Supplemental Claim is a claim readjusting the initial claim payment due to delayed disbursements or claim calculation or payment errors. ii. Standard The Mortgagee may submit one supplemental claim within six months of final settlement for conveyance claims or full settlement for all other claim types in the following circumstances: • when a vendor delays submitting an invoice to the Mortgagee for an allowable expense; • for amounts paid after the date the original claim was filed if the obligations were incurred before the deed or assignment to HUD was filed for record or was paid on HUD’s written instruction; • requests for reconsideration of disallowed costs; or • additional attorney fees not paid on the original claim. The Mortgagee may submit subsequent supplemental claims in the following circumstances: • overpayments due to HUD; • hazard insurance refund adjustments; • deficiency Judgments; • additional unpaid principal balance, with debenture interest, not paid on the original claim; or IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1604 Last Revised: 11/26/2025 • where the Mortgagee has received approval from the Single Family Claims Branch to file a subsequent supplemental. The Mortgagee may not submit supplemental claims prior to receipt of the original Part B payment except when Part A was overpaid. iii. Overpayments and Funds Due HUD (A) Definition An Overpayment is HUD’s payment of a claim in an inaccurate amount that results in money owed by the Mortgagee to HUD. (B) Claim Involves Overpayment If the claim involves an overpayment, the Mortgagee must: • remit amounts due; and • retain in the Claim File a supplemental claim Part A explaining how the overpayment occurred in the “Mortgagee’s comments” section. (C) Claim Involves a Computation of Interest If the amount overpaid or received involved a computation of interest, the Mortgagee must: • remit amounts due to HUD, including in the reimbursement: o interest calculated by the Mortgagee and included in Part B; and o interest calculated by HUD for the period from the date of claim to the date of payment; and • retain in the Claim File a supplemental claim Part A explaining how the overpayment occurred in the “Mortgagee’s comments” section. (D) Remittance of Amounts Due The Mortgagee must remit amounts due via pay.gov using the Claim Remittance functions in FHAC. iv. Hazard Insurance Refund Adjustment (A) Standard The Mortgagee may submit a supplemental claim for a hazard insurance refund adjustment when it has met all of the following conditions: • hazard insurance costs were included in the initial submission of form HUD- 27011, Part B; and • the Mortgagee has documented in its Claim File its efforts in diligently following up with the hazard insurance carrier to confirm any necessary adjustment. IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1605 Last Revised: 11/26/2025 Refer to Time Frame for Submission of Hazard Insurance Refund Adjustment for guidance regarding the period during which such a supplemental claim may be submitted. (B) Claim Form Preparation When completing and submitting the supplemental claim, the Mortgagee must: • include a copy of the carrier’s notification with its submission; and • clearly indicate in the “Mortgagee’s comments” section that the supplemental claim is being filed to recover an adjustment to the hazard insurance premium refund. v. Deficiency Judgments The Mortgagee may submit one supplemental claim for the additional costs related to the pursuit of the deficiency Judgment when all such known costs were included in the initial submission of Part B of form HUD-27011, or, to the extent possible, are claimed within six months from the date of final settlement of the initial Part B. vi. Attorney Fees The Mortgagee may submit a supplemental claim for attorney fees if it believes that it is entitled to an amount more than was actually reimbursed in the initial claim payment. The supplemental claim must include: • a supplemental claim form HUD-27011, with an explanation of the need for the increased fee in “Mortgagee’s comments;” • a copy of all Parts submitted in the original claim filing; • a copy of the final Advice of Payment letter; and • copies of the attorney chronology and any documentation necessary to support the additional claimed amount. The Mortgagee must retain in the Claim File adequate documentation supporting all attorney fees. Should HUD determine in a post-claim review that the claim for attorney fees is greater than allowed amounts or is unsupported by documentation, HUD will bill the Mortgagee for overpayment as: • an amount statistically calculated for all claims within the review period; or • the actual amount of the overpayment, if the review was not based on a statistical sample. vii. Claims for Additional Funds The Mortgagee may submit one supplemental claim for additional funds within six months of the date of final settlement for conveyance claims or full settlement for all other claim types. IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1606 Last Revised: 11/26/2025 (A) Supplemental Claims for Correction of Dates in Part A When the claim for additional funds is based on a corrected date on the Part A claim, the Mortgagee must include: • the form HUD-27011 reflecting the corrected date(s); • the reason for the supplemental claim in the “Mortgagee’s comments” section; • the certification on the accuracy and validity of all other dates in the “Mortgagee’s comments” section; and • all supporting documentation. (1) Certification When the claim for additional funds is based on a corrected date on the Part A claim, the Mortgagee must provide with this supplemental claim a certification as to the accuracy and validity of all other dates on the Part A claim which affect time requirements and the payment of interest on the claim. This certification must include: • a statement that all such dates have been rechecked against the claim filing instructions in this Handbook 4000.1; and • a statement describing the document referenced by the Mortgagee for each of these dates. (2) Required Supporting Documentation The Mortgagee must provide the following supporting documentation for corrected claims: • Item 8, “Due date last complete installment paid”: Include Mortgage Payment history record. • Item 9, “Date of possession and acquisition of marketable title”: Include legal documentation such as sheriff’s deed, redemption documentation, receipt of sale funds, recorded DIL, proof of eviction date, inspection report, and a chronology of events from the date in Item 11 to the date in Item 9. • Item 10, “Date deed or assignment filed for record or date of closing or appraisal”: Include recorded deed or assignment, transmittal letter to recording authority, or Closing Disclosure or similar legal document. • Item 11, “Date foreclosure proceedings (a) Instituted or (b) Date of deed in lieu”: Include documentation of first legal action taken to institute foreclosure, such as the recorded complaint, or publication of notice of sale, or the recorded DIL. • Item 17, “Unpaid loan balance as of date in block 8”: Include copies of the mortgage Note, Loan Modification (if applicable), and payment history record. • Item 19, “Expiration date of extension to foreclose/assign”: Include the printout from Extensions and Variances Automated Requests System (EVARS) of HUD’s approval (form HUD-50012, Mortgagee’s Request IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1607 Last Revised: 11/26/2025 for Extensions of Time) of the extension and/or supporting documentation for all automatic extensions. • Item 20, “Date of notice/extension to convey”: Include the printout of the MCM’s approval (form HUD-50012) from P260 or support for the SFLS Claim Identification Date. • Item 21, “Date of release of bankruptcy, if applicable”: Include a copy of the bankruptcy initiation document and release notice, release of stay, or discharge notice. • Item 31, “Mortgagee reported curtailment date”: Include form HUD- 27011 Part D filed with the original claim submission, with applicable documentation to support curtailment correction. • “Disbursements for Protection and Preservation”: Include the form HUD- 27011 Part C filed with the original claim submission, with supporting documentation for all P&P expenses. • Disbursements (taxes, HIP, possessory action costs), foreclosure costs, attorney fees, bankruptcy costs, all other disbursements: Include documentation showing payment made, including paid receipts or invoices and supporting documentation. If cost incurred after the date the deed or assignment was filed for recording, include a printout of the MCM’s approval from P260 to pay costs. • Taxes paid after date of deed to HUD: If taxes were paid after the date the deed or assignment was filed for recording, include a printout of the MCM’s approval for payment before filing a supplemental claim. (B) Claims for Additional Funds When Subject to Administrative Offsets Not Permitted The Mortgagee must not claim additional funds when HUD is offsetting amounts. (C) Claims for Funds Related to Partial Claims Not Permitted If the Mortgagee claimed less than the actual Partial Claim note amount, the Mortgagee must absorb the cost of the miscalculation and must not: • claim the additional funds from HUD; or • add the deficient note amount to the Borrower’s mortgage balance. HUD will not accept corrected Partial Claims. viii. Submission of Supplemental Claim Form Parts to HUD The Mortgagee must submit supplemental claims in accordance with HUD guidance pertaining to Claim Type 05 submissions. Mortgagees must submit supplemental claims electronically through the FHA Catalyst Claims Module, (A) or (B). IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1608 Last Revised: 11/26/2025 (A) FHA Catalyst: Claims Module The Mortgagee must upload to the Claims Module: • copies of the original Parts A and B of the supplemental claim; • copies of Parts C, D, and E of the supplemental claim, if applicable; • supporting documents; and • copies of all Parts of the original claim. (B) Time Frame for Submission of Supplemental Claims For supplemental claims involving overpayments identified by the Mortgagee, including its own QC reviews, the Mortgagee may submit a remittance of overpayments and funds received by the Mortgagee at any time. For supplemental claims involving recouping additional unpaid principal balance not reimbursed on the original Part A claim, the Mortgagee may submit a claim at any time. For all other supplemental claims, the Mortgagee must submit supplemental claims no later than six months after the date of final payment, except where noted below. (1) Time Frame for Submission of Hazard Insurance Refund Adjustment The Mortgagee may submit a supplemental claim for a hazard insurance refund adjustment under any of the following conditions: • within six months from the date of final settlement of the original Part B claim; or • if the Mortgagee received the insurance carrier’s notification more than six months from the date of final payment, the Mortgagee must submit the supplemental claim within 24 Days from the date of the insurance carrier’s notification and must document in its Claim File its efforts in diligently following up with the hazard insurance carrier to confirm any necessary adjustment. HUD will not accept the supplemental claim for a hazard insurance refund adjustment more than one year from the date of final settlement. (2) Time Frame for Submission of Deficiency Judgments Costs When HUD has required the Mortgagee to pursue a deficiency Judgment, the Mortgagee must submit one supplemental claim for the additional costs related to the deficiency Judgment within the latter of: • one year from the date of final settlement of the initial Part B; or • three months after the deficiency Judgment. IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1609 Last Revised: 11/26/2025 (3) Extension to Time Frame for Submission If more than one year is needed to request reimbursement for related Housing Insurance Premium (HIP) adjustments or deficiency Judgments, the Mortgagee must request an extension from the MCM. When using an extension based on deficiency Judgments or HIP adjustments, the Mortgagee may not include in its supplemental claim other types of costs they may have failed to include in the earlier claim. The Mortgagee must include with its supplemental claim an electronic copy of the MCM’s approval (form HUD-50012). (4) HUD Requests for Additional Information Supplemental claims previously submitted and returned to the Mortgagee for further information must be received by HUD as soon as possible but no later than 45 Days from the date of HUD’s letter and/or request. ix. Variance Requests for Additional Supplemental Claim Submissions The Mortgagee generally may only submit one supplemental claim. When circumstances outside of the Mortgagee’s control require the submission of additional supplemental claims, the Mortgagee must submit a request to the Single Family Claims Branch before filing a supplemental claim. x. Appeals of Supplemental Claim Disposition The Mortgagee may submit an appeal of a denied supplemental claim within 60 Days from the date the supplemental claim was denied through the FHA Catalyst System or via an encrypted email to FHASupplementalClaims@hud.gov with the subject: Supplemental Claim Appeal XXX-XXXXXX. d. Claim Type 06 - Claims Without Conveyance of Title (04/28/2025) [Updates in this section must be implemented for Post-Foreclosure Sales scheduled to occur on or after August 3, 2022] i. Computation of Interest (A) Debenture Interest Provided that the Mortgagee has met all time requirements, HUD will pay debenture interest on the unpaid principal balance from the date of Default to either: • the date the Mortgagee or third-party bidder obtains title; or • the date the Borrower redeems the Property. IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1610 Last Revised: 11/26/2025 HUD will then pay debenture interest on the difference between the unpaid principal balance and the greater of either the CAFMV, redemption amount, or the third-party bid, to the date of final payment of the claim. (B) Calculating Interest for an Expenditure Using Daily Interest Rate Factors HUD will pay debenture interest on expenses from the date of expenditure to the date of final payment of the claim, as calculated using the method in Calculating Interest for an Expenditure using Daily Interest Rate Factors. (C) Calculating Interest for Default after Special Forbearance-Unemployment or Special Forbearance When the Mortgagee files a claim for insurance benefits after a Default under an SFB-Unemployment Agreement or SFB, HUD will pay mortgage note interest as calculated under the procedures in Calculating Interest for Default after Special Forbearance-Unemployment or Special Forbearance. (D) Curtailment of Interest The Mortgagee must self-curtail interest on Single Family claims for the following failures to meet HUD requirements as of the date on which the required action should have been taken: • failure to timely initiate foreclosure; • failure to give HUD notice of foreclosure; • failure to meet Reasonable Diligence Time Frames; and • failure to file the claim within 30 Days of: o the date the Mortgagee acquired good marketable title; o the date a third party acquired good marketable title; o the date the Borrower or other party redeemed the Property; o the date the redemption period expires; or o such other date as required by the FHA Commissioner. If more than one time requirement is missed and there are no applicable extensions, the Mortgagee must calculate the interest for the claim payment to the earliest missed time requirement. ii. Computation of Claim Amount (A) Standard The Mortgagee may claim 100 percent of the unpaid principal balance, plus allowable costs and debenture interest. HUD will deduct from the claim amount the sale bid or redemption price. IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1611 Last Revised: 11/26/2025 (B) Eviction and P&P Costs When Property Is Sold to a Third Party When filing a CWCOT claim where a third party is the successful bidder at the foreclosure sale, the Mortgagee may not claim eviction costs as part of the CWCOT claim. Mortgagees may only be reimbursed for Cash for Keys on CWCOT claims resulting from post-foreclosure sales efforts. When a third party is the successful bidder at the foreclosure sale or the Mortgagee elects to retain the Property and file a CWCOT claim, the Mortgagee may claim reimbursement for Property P&P costs incurred before the foreclosure sale. If the Property is sold as part of a post-foreclosure sales effort, the Mortgagee may claim reimbursement for Property P&P costs incurred before the Closing Date. (C) Hazard Insurance Premiums HUD will not reimburse the Mortgagee for any hazard insurance premiums allocated to the period after acquisition of title by the Mortgagee or a third party. (D) Deficiency Judgments When HUD requests that the Mortgagee pursue a deficiency Judgment pursuant to 24 CFR § 203.369, the Mortgagee may request full reimbursement of certain fees. (E) Third-Party Auction Service Fees For successful third-party sales only, HUD will reimburse Mortgagees for independent third-party auction service fees they incur for an amount that does not exceed 5 percent of a Property’s sales price. iii. Submission of Claim Form Parts to HUD for CWCOT The Mortgagee must submit Parts A and B simultaneously no later than 30 Days after: • the date the Mortgagee acquired good marketable title; • the date a third party acquired good marketable title; • the date the Borrower or other party redeemed the Property; • the date the redemption period expires; or • such other date as required by the FHA Commissioner. When filing via EDI, FHA Catalyst, or FHAC, the Mortgagee must submit Parts A and B no later than two Days after the date the form was prepared. When submitting via FHA Catalyst, the Mortgagee must also submit Parts C, D, and E. In all cases, the Mortgagee must also upload into P260: • all Parts of form HUD-27011; • the Closing Disclosure or similar legal document for post-foreclosure sales; • the appraisal; • appraisal invoices; IV. CLAIMS AND DISPOSITION A. Title II Claims 2. Claim Types Handbook 4000.1 1612 Last Revised: 11/26/2025 • a worksheet reflecting the Mortgagee’s application of the CAFMV. The worksheet must include the CAFMV adjustment percentage provided in the instructions on FHAC, and where applicable, the state-mandated foreclosure price; and • a third-party service fee invoice for auction services, if applicable.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part IV — c. Claim Type 05 - Supplemental Claims/Remittances (03/01/2023) · source URL · snapshot 8c03836f77f317e1