FHA Single Family Housing Policy Handbook 4000.1, IV. CLAIMS AND DISPOSITION > C. Title I Claims > 1. Title I Claims for Property Improvement — h. Abbreviated Claim
HUD effective date: 05/09/2022 · section IV.C.1 · Handbook 4000.1
FHA Single Family Housing Policy Handbook 4000.1, Part IV — h. Abbreviated Claim (05/09/2022).
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Verbatim provisions from FHA Single Family Housing Policy Handbook 4000.1, IV. CLAIMS AND DISPOSITION > C. Title I Claims > 1. Title I Claims for Property Improvement — h. Abbreviated Claim — 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 — h. Abbreviated Claim (05/09/2022)
h. Abbreviated Claim (05/09/2022) i. Standard The abbreviated filing process allows insurance termination on Defaulted Loans when there is no expectation of claim payment. The Lender may submit an abbreviated claim to terminate premium billing when: • the Loan is in Default and no Reserves are left; or • the claim would not be payable for other reasons. ii. Required Documentation The Lender must submit: • form HUD-637, Part II with items 1–10 and 15–18 completed. The Lender, or an agent of the Lender with proper Power of Attorney (POA), must sign form HUD- 637, with their full name and title included in box 16; • a certification stating that the claim is being filed to stop premium charges, no claim payment is expected and no claim resubmission will occur. The Lender, or an agent of the Lender with proper POA, must sign the certification. Please also indicate that there are no Reserves, or why no claim payment is expected; • copies of the Notices of Default and Acceleration. In the event that the Lender could not issue the notice due to bankruptcy, include documentation of the bankruptcy filing; • documentation verifying that the Lender has updated credit bureau reporting to show Default has occurred; and • a copy of the Note and security instrument (where applicable). No assignment to HUD is required. If the Lender does not have a copy of the Note, the Lender may send HUD a Missing Document Statement for the Note along with the copy of the security instrument, if the security instrument details the terms of the Loan. Lenders must mail the abbreviated claim package to the FOC. To expedite processing, the Lender must use an attention line of “Abbreviated Claim Filing.” iii. HUD Review of Abbreviated Claim HUD will review the documentation to ensure that the Loan is a Title I Loan previously reported for insurance and that a Default has occurred. Once confirmed, HUD will accept the abbreviated claim filing and deny the claim benefits since it is not payable. This claim denial will stop subsequent insurance charges from being billed. Lenders can confirm termination of billing by reviewing their next monthly Title I billing statement. These Loans will appear in the “RENEWAL CANCELLATION” section of the bill.
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