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d. Servicing of FHA-Insured Title II Mortgages and Title I Loans (05/09/2022)
i. Title II Mortgages
The servicing of FHA-insured Title II Mortgages must be performed by an FHA- approved Mortgagee with Title II program approval and approval to service Title II Mortgages. FHA-approved Mortgagees that use a subservicer to service FHA-insured Title II Mortgages must ensure the subservicer is also approved by FHA to service FHA- insured Title II Mortgages. The servicing Title II Mortgagee is responsible for the actions of its subservicers.
ii. Title I Loans Held by Supervised, Nonsupervised, and Government Title I
Lenders
An Agent is not required to be approved as a Title I Lender to service Title I Loans that are held by the Supervised, Nonsupervised, or Government Title I Lender. The Title I Lender holding the Title I Loans is responsible for ensuring the Loans are serviced by the agent in accordance with HUD/FHA requirements.
iii. Title I Loans Held by Title I Investing Lenders
A Title I Investing Lender may not directly service Title I Loans it holds except with the prior approval of the Department. All Title I Loans held by a Title I Investing Lender without servicing authority must be serviced or subserviced by a Title I Lender with a Title I Contract of Insurance and approval to service Title I Loans.