FHA Single Family Housing Policy Handbook 4000.1, Part IV — e. Method and Notification of Payment (05/09/2022)

FHA Single Family Housing Policy Handbook 4000.1, Part IV — e. Method and Notification of Payment (05/09/2022)

e. Method and Notification of Payment (05/09/2022) The Debt Collection Improvement Act of 1996 directs federal agencies to disburse funds via Electronic Funds Transfer (EFT). i. Electronic Funds Transfer In order to receive claim payments, the Lender must have completed the SF 3881 form, ACH Vendor/Miscellaneous Payment Enrollment. To wire payments to a Lender’s bank account, HUD must receive a completed SF 3881 form. Processing this form takes several weeks as does testing through the Federal Reserve System. It is advisable for a Lender to have the form on file with HUD before filing a claim. The form can be obtained from the FOC. After completing the SF 3881 form, Lenders must mail it to the address on the form. ii. Notification and Identification of Claim Payment Upon claim payment, a record will be attached to each EFT payment that includes the FHA case number and the Lender’s loan number reported to HUD when the Loan was first reported for insurance. Details of the claim status and claim payment of a Loan can be found online using FHAC. iii. Lender Responsibilities after Insurance Claim Payment The Lender must not attempt to collect money from the Borrower, including the coinsurance loss, after a claim is paid. Since the loan Note is assigned to the United States, the Lender has no basis from which to make demand upon a Borrower. After claim payment, the Lender must refer any legal notices, inquiries, correspondence, or payment to HUD’s FOC.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part IV — e. Method and Notification of Payment (05/09/2022) · source URL · snapshot 8c03836f77f317e1