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v. Record Retention – Servicing File (04/29/2024)
i. Definition
The Servicing File refers to the Mortgagee’s record of all servicing activity on an FHA- insured HECM.
ii. Standard
The Mortgagee must retain all Servicing Files for a minimum of three years after the transfer or sale of the HECM or termination of mortgage insurance. The Mortgagee must maintain accurate records for each HECM serviced. In addition to the specific documentation requirements stated in this Handbook 4000.1, these records must include the following information:
• HECM origination and endorsement documentation, including copies of the following documents, if applicable: Conditional Commitment Direct Endorsement Statement of Appraised Value; form HUD-92900.4, Firm Commitment, if applicable; HECM loan agreement and exhibits;
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III. SERVICING AND LOSS MITIGATION B. Title II Insured Housing Programs Reverse Mortgages
2. Default Servicing
Fannie Mae Form 1009, Residential Loan Application for Reverse Mortgages
(RLARM), and Fannie Mae Form 1003/Freddie Mac Form 65, Uniform Residential Loan Application (URLA); Financial Assessment Worksheet; and Mortgage Insurance Certificate (MIC);
• MIP payments made;
• documentation related to any recovery of hazard insurance proceeds; and
• the FHA-insured HECMs in the Mortgagee’s portfolio and information on which HECMs have been acquired, sold, paid in full, and voluntarily terminated.
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.”
Where 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 the Mortgagee to provide information evidencing reconciliation of Mortgagee records with HUD. This information may include identification, by HECM, of the following:
• amount of MIP due and paid to HUD by time period for each insured HECM;
• date insurance was terminated or servicing transferred, if applicable; and
• date servicing was acquired, for HECMs acquired.
The Mortgagee must ensure that HUD’s records accurately reflect the status of the HECM and both the correct Holder and Servicer of record.
iv. Electronic Storage
Where retention of a hard copy or original document is not required, the Mortgagee 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.