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f. Claims (11/10/2026)
i. Claim Guidance
(A) Claim Not Permitted after Satisfaction of a HECM by Payoff
A Mortgagee must not file a claim for insurance benefits when the HECM is satisfied in full.
A bid by any party other than the Mortgagee at a foreclosure sale for the full debt, consisting of the outstanding HECM balance and any and all other incurred expenses, will result in a full Payoff of the HECM. In such cases, the Mortgagee must not file a claim for insurance benefits.
(B) Contract of Insurance Not Terminated
The Mortgagee may only file a claim for insurance benefits where the contract of insurance has not terminated.
(C) Time Frames for Filing Claims
(1) Case Numbers Assigned before September 19, 2017
The Mortgagee must file a claim within 15 Days of:
• the Mortgagee selling the Property acquired through foreclosure or DIL;
• a sale by the Borrower or other party with legal right to dispose of the Property;
• satisfaction of the HECM by the Borrower’s estate or heir; or
• assignment of the HECM to the Secretary.
(2) Case Numbers Assigned on or after September 19, 2017
The Mortgagee must file a claim within 30 Days of:
• the Mortgagee selling the Property acquired through foreclosure or DIL;
• a sale by the Borrower or other party with legal right to dispose of the Property; or
• satisfaction of the HECM by the Borrower’s estate or heir.
The Mortgagee must file a claim within 15 Days of assignment of the HECM to the Secretary.
If the Property will not be sold within six months from the foreclosure sale date where the Mortgagee was the successful bidder, the Mortgagee must file a claim no later than 30 Days after the end of the six-month period. The Mortgagee must
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use a valid appraisal, substituting the appraised value for the sales price of the Property.
(D) Claims Filed in HERMIT
All HECM claims must be filed with supporting documentation in HERMIT using the appropriate timeline. The unpaid principal balance of the HECM is capped as of the due date. The Mortgagee must itemize all allowable expenses incurred after the Due and Payable Date.
(E) Claims Limited by Maximum Claim Amount
(1) Case Numbers Assigned before September 19, 2017
In no case may the claim paid exceed the MCA. The interest allowance provided in 24 CFR § 206.129(d)(3)(x), (e)(2), and (f)(2)(i) will not be included in determining the limit on the claim amount.
(2) Case Numbers Assigned on or after September 19, 2017
In no case may the claim paid exceed the MCA. The interest allowance provided in 24 CFR § 206.129(d)(3)(x), (e)(2), and (f)(2)(ii) will be made in cash in the amount determined under the regulations and will be included in determining the limit on the claim amount.
(F) Debenture Interest Rate
(1) Definitions
For purposes of payment of debenture interest, the Date of Default is the Due and Payable Date.
The Semi-Annual Rate is the rate in effect for debentures listed at https://www.hud.gov/hud-partners/housing-debenture-interest-rates.
The 10-Year CMT Rate is the rate in effect on United States Treasury Securities adjusted to a constant maturity of 10 years listed at https://www.hud.gov/hud- partners/housing-debenture-interest-rates.
(2) Standard
(a) Mortgages Endorsed before January 23, 2004, Regardless of when a
Claim is Filed and Mortgages Endorsed on or after January 23, 2004, with a Due and Payable Date prior to September 19, 2017
The debenture interest rate is the higher of:
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• the Semi-Annual Rate as of the date the commitment was issued, if applicable; or
• the Semi-Annual Rate as of the date the Mortgage was endorsed.
(b) Mortgages Endorsed after January 23, 2004, that have a Due and
Payable Date on or after September 19, 2017, and before September 28, 2024
The debenture interest rate is the higher of:
• the Semi-Annual Rate for the commitment was issued, if applicable;
• the Semi-Annual Rate for the month Mortgage was endorsed; or
• the 10-Year CMT Rate for the month the Mortgage became Due and Payable.
(c) Mortgages Endorsed after January 23, 2004, with a Due and Payable
Date on or after September 28, 2024
The debenture interest rate is the 10-year CMT rate for the month the Mortgage became Due and Payable.
(G) Curtailment of Interest for Noncompliance with HUD HECM Program
Requirements
Causes for curtailment of interest include, but are not limited to, the Mortgagee’s failure to:
• timely request due and payable approval from HUD within 30 Days of the occurrence of a Due and Payable event for which HUD approval is needed;
• timely provide notice to HUD of the death of the last surviving Borrower or conveyance of title within 60 Days of the occurrence of the Due and Payable event;
• timely provide notice to HUD within 60 days after the end of the Deferral Period;
• timely provide the required due and payable notice to the Eligible NBS within 30 Days after the end of the Deferral Period;
• timely provide the required due and payable notice to the Borrower, their estate, heir, or other party with legal title to the Property that the HECM is Due and Payable within 30 Days of providing notice to HUD of the Due and Payable event or receiving HUD approval when needed;
• comply with the required appraisal time frames;
• timely commence foreclosure, when applicable;
• timely provide notice to HUD after commencing foreclosure, meeting reasonable diligence requirements, or meeting reporting requirements, pursuant to Appendix 6.0 – First Legal Actions to Initiate Foreclosure and Reasonable Diligence Time Frames; and
• timely file claims for payment of insurance benefits.
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The Mortgagee must self-curtail claims for failure to meet any of FHA’s requirements or reasonable diligence time frames of 24 CFR §§ 206.125 and 206.127 except to the extent those time frames are extended by HUD, as authorized by law. In that event, the Mortgagee must self-curtail claims when they fail to comply within the extended time. The Mortgagee must state the reason for curtailment in the “Mortgagee Comments” section of the claim in HERMIT.
If the Mortgagee does not self-curtail when reasonable diligence time frames are not met, the Mortgagee must fully document in HERMIT the reasons for delays that were outside of the Mortgagee’s control.
(H) Reporting Use of Mortgagee Extension
If applicable, the Mortgagee must enter the expiration date of the 90-Day extension period in the block identified for extensions in the claim in HERMIT and note the use of the extension in the “Mortgagee’s Comments” section.
(I) Mortgagee Incentives
FHA will pay an incentive fee to Mortgagees for completion of a Short Sale or a DIL in the amount of $1,500. The Mortgagee must enter the incentive amount in block 305 of form HUD-27011, Single-Family Application for Insurance Benefits.
(J) Probate Costs
Where permitted to be paid as a Cash for Keys incentive, probate costs may not exceed $5,000. Any probate costs claimed over $500 require supporting documentation. The probate costs must be reasonable and customary for the area. The Mortgagee must enter the probate costs in block 305 of form HUD-27011.
ii. Acquired Property Claims (Claim Type 21)
Date of Marketable Title for HECM Claims
The Mortgagee must use the latter of the following in determining the “Date of Possession and Acquisition of Marketable Title” on the claim:
• the date of possession, including when eviction is required;
• the date of the foreclosure sale;
• the date title is obtained by a third-party bidder; or
• the date the redemption period, if applicable, has ended.
iii. Assignment Claims (Claim Type 22)
The Mortgagee may file a HECM Assignment Claim (Claim Type 22) upon successful assignment of a HECM to HUD.
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iv. Short Sale Claims (Claim Type 23)
The Mortgagee may file a HECM Short Sale Claim (Claim Type 23) in cases where:
• the Borrower sold the Property, but the sales proceeds were insufficient to satisfy the HECM, provided: the Property was sold for at least the current appraised value if the HECM was
not Due and Payable; or the Property was sold for at least 95 percent of the current appraised value if
the HECM was Due and Payable; or
• the HECM was extinguished by sale or transfer after death or, if applicable, the end of a Deferral Period, provided the Mortgagee received, in exchange for the extinguishment of the HECM, at least the lesser of: the HECM balance; or 95 percent of the current appraised value of the Property.
(A) Claim Calculation – Case Number Assigned before September 19, 2017
The claim amount will include:
• the total of the following: the HECM balance, including any accrued interest, MIP, and servicing
fees that have been added to the HECM balance; any accrued note rate interest, MIP, or servicing fees that have not been
added to the HECM balance on the date the deed is recorded; and the amount of allowances for items set forth in
24 CFR § 206.129(d)(3)(i)–(vii) and (d)(3)(xii) as applicable;
• less the proceeds received from the Borrower, the Borrower’s estate, or heir;
• plus, if the short sale occurred after the initiation of foreclosure, the total of the items set forth in 24 CFR § 206.129(d)(3)(vi) and (ix), as applicable.
The claim will also include debenture interest from the date the deed is recorded to the date when the claim is paid, providing the Mortgagee has complied with all applicable time frames required. Where the Mortgagee has failed to meet any of the applicable requirements within the specified time, or additional time approved by HUD, the interest allowance will be computed only to the date on which the particular action should have been taken or to which it was extended.
(B) Claim Calculation – Case Number Assigned on or after September 19, 2017
(1) HECM Not Due and Payable
When the HECM is not in Due and Payable status, the claim will include:
• the total of the following: the HECM balance, including any accrued interest, MIP, and servicing
fees that have been added to the HECM balance; any accrued note rate interest, MIP, and servicing fees that have not
been added to the HECM balance on the date the deed is recorded; and
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allowable closing costs incurred in connection with the sale of the
Property in an amount not to exceed the greater of 11 percent;
• less the proceeds received from the Borrower, the Borrower’s estate, or heir.
The claim will also include debenture interest from the date the deed is recorded to the date when the claim is paid, provided the Mortgagee has complied with all applicable time frames required. Where the Mortgagee has failed to meet any of the applicable requirements within the specified time, or additional time approved by HUD, the interest allowance will be computed only to the date on which the particular action should have been taken or to which it was extended.
(2) HECM Due and Payable
When the HECM is in Due and Payable status, the claim will include:
• the total of the following: the HECM balance, including any accrued interest, MIP, and servicing
fees that have been added to the HECM balance; any accrued interest, MIP, and servicing fees that have not been added
to the outstanding HECM balance as of the due date; allowable closing costs incurred in connection with the sale of the
Property in an amount not to exceed the greater of 11 percent or any fixed dollar amount as approved by HUD through the Federal Register notice as set forth in 24 CFR § 206.129(d)(3)(xiii)(C); and the remaining items set forth in 24 CFR § 206.129(d)(3);
• less the proceeds received from the Borrower, the Borrower’s estate, or heir.
The claim will also include debenture interest from the due date to the date the claim is paid, providing the Mortgagee has complied with all applicable time frames required. Where the Mortgagee has failed to meet any of the applicable requirements of 24 CFR §§ 206.125 and 206.127 within the specified time determined by the due date, or additional time approved by HUD, the interest allowance will be computed only to the date on which the particular action should have been taken or to which it was extended.
v. Supplemental Claims (Claim Type 24)
The Mortgagee may file one supplemental claim (Claim Type 24) to correct a previous claim or to claim an item omitted in a previous claim. Where the Mortgagee wishes to file a supplemental claim, the Mortgagee must submit such claim within six months of the date the initial claim was paid.
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3. Programs and Products - Presidentially-Declared Major Disaster Areas (04/29/2024)