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n. Record Retention – Servicing File (03/31/2022)
i. Definition
The Servicing File refers to the Mortgagee’s record of all servicing activity on an FHA- insured Mortgage.
ii. Standard
Mortgagees must retain all Servicing Files for a minimum of seven years after the transfer or sale of the Mortgage or termination of mortgage insurance. The Mortgagee must maintain accurate records for each Mortgage serviced. In addition to the specific documentation requirements stated in this Handbook 4000.1, these records must include the following information:
• Mortgage origination and endorsement documentation, including copies of the following documents, if applicable:
o the Conditional Commitment for insurance;
o the Firm Commitment;
o form HUD-92900-LT, FHA Loan Underwriting and Transmittal Summary;
and
o the Mortgage Insurance Certificate (MIC);
• MIP payments made;
• all servicing actions, including resolution of any servicing errors;
• documentation related to any recovery of hazard insurance proceeds; and
• the FHA-insured Mortgages in the Mortgagee’s portfolio and information on which Mortgages have been acquired, sold, paid in full, and voluntarily terminated.
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III. SERVICING AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages
2. Default Servicing
The Mortgagee must also retain, in electronic and hard copy, the Mortgage, mortgage Note, deed of trust, or a lost note affidavit acceptable under state law, with the electronic copy marked “copy.”
For cases for which a claim is filed, the Mortgagee must retain documentation in compliance with the Claim File section for at least seven years after the final claim or latest supplemental claim settlement date.
iii. Record Reconciliations
HUD may require Mortgagees to provide information evidencing reconciliation of Mortgagee records with HUD. This information may include identification, by Mortgage, of the following:
• amount of MIP due and paid to HUD by time period for each insured Mortgage;
• date insurance was terminated or servicing transferred, if applicable; and
• date servicing was acquired, for Mortgages acquired after September 1, 1982.
All Mortgagees must ensure that HUD’s records accurately reflect the status of the Mortgage and both the correct Mortgage Holder and Servicer of record.
iv. Electronic Storage
Where retention of a hard copy or original document is not required, Mortgagees may use electronic storage methods for all servicing-related documents required in accordance with HUD regulations, handbooks, Mortgagee Letters, and notices.
Regardless, the Mortgagee must be able to make available to HUD in the format (electronic or hard copy) requested legible documents within 24 hours of a request or as otherwise prescribed by HUD.