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d. Claim Type 06 - Claims Without Conveyance of Title (04/29/2026)
i. Computation of Interest
(A) Debenture Interest
Provided that the Mortgagee has met all time requirements, HUD will pay debenture interest on the unpaid principal balance from the date of Default to either:
• the date the Mortgagee or third-party bidder obtains title; or
• the date the Borrower redeems the Property.
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IV. CLAIMS AND DISPOSITION A. Title II Claims
2. Claim Types
HUD will then pay debenture interest on the difference between the unpaid principal balance and the greater of either the CAFMV, redemption amount, or the third-party bid, to the date of final payment of the claim.
(B) Calculating Interest for an Expenditure Using Daily Interest Rate Factors
HUD will pay debenture interest on expenses from the date of expenditure to the date of final payment of the claim, as calculated using the method in Calculating Interest for an Expenditure using Daily Interest Rate Factors.
(C) Calculating Interest for Default after Special Forbearance-Unemployment or
Special Forbearance
When the Mortgagee files a claim for insurance benefits after a Default under an SFB-Unemployment Agreement or SFB, HUD will pay mortgage note interest as calculated under the procedures in Calculating Interest for Default after Special Forbearance-Unemployment or Special Forbearance.
(D) Curtailment of Interest
The Mortgagee must self-curtail interest on Single Family claims for the following failures to meet HUD requirements as of the date on which the required action should have been taken:
• failure to timely initiate foreclosure;
• failure to give HUD notice of foreclosure;
• failure to meet Reasonable Diligence Time Frames; and
• failure to file the claim within 30 Days of:
o the date the Mortgagee acquired good marketable title;
o the date a third party acquired good marketable title;
o the date the Borrower or other party redeemed the Property;
o the date the redemption period expires; or
o such other date as required by the FHA Commissioner.
If more than one time requirement is missed and there are no applicable extensions, the Mortgagee must calculate the interest for the claim payment to the earliest missed time requirement.
ii. Computation of Claim Amount
(A) Standard
The Mortgagee may claim 100 percent of the unpaid principal balance, plus allowable costs and debenture interest. HUD will deduct from the claim amount the sale bid or redemption price.
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IV. CLAIMS AND DISPOSITION A. Title II Claims
2. Claim Types
(B) Eviction and P&P Costs When Property Is Sold to a Third Party
When filing a CWCOT claim where a third party is the successful bidder at the foreclosure sale, the Mortgagee may not claim eviction costs as part of the CWCOT claim. Mortgagees may only be reimbursed for Cash for Keys on CWCOT claims resulting from post-foreclosure sales efforts.
When a third party is the successful bidder at the foreclosure sale or the Mortgagee elects to retain the Property and file a CWCOT claim, the Mortgagee may claim reimbursement for Property P&P costs incurred before the foreclosure sale. If the Property is sold as part of a post-foreclosure sales effort, the Mortgagee may claim reimbursement for Property P&P costs incurred before the Closing Date.
(C) Hazard Insurance Premiums
HUD will not reimburse the Mortgagee for any hazard insurance premiums allocated to the period after acquisition of title by the Mortgagee or a third party.
(D) Deficiency Judgments
When HUD requests that the Mortgagee pursue a deficiency Judgment pursuant to 24 CFR § 203.369, the Mortgagee may request full reimbursement of certain fees.
(E) Third-Party Auction Service Fees
For successful third-party sales only, HUD will reimburse Mortgagees for independent third-party auction service fees they incur for an amount that does not exceed 5 percent of a Property’s sales price.
(F) Foreclosure and Acquisition Costs
HUD will reimburse Mortgagees for amounts actually paid by the Mortgagee over the credit bid necessary to acquire the Property at CAFMV at the foreclosure sale. Mortgagees must list the amount in Item 305 of Part D and provide documentation in P260.
iii. Submission of Claim Form Parts to HUD for CWCOT
The Mortgagee must submit Parts A and B simultaneously no later than 30 Days after:
• the date the Mortgagee acquired good marketable title;
• the date a third party acquired good marketable title;
• the date the Borrower or other party redeemed the Property;
• the date the redemption period expires; or
• such other date as required by the FHA Commissioner.
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IV. CLAIMS AND DISPOSITION A. Title II Claims
2. Claim Types
When filing via EDI, FHA Catalyst, or FHAC, the Mortgagee must submit Parts A and B no later than two Days after the date the form was prepared. When submitting via FHA Catalyst, the Mortgagee must also submit Parts C, D, and E.
In all cases, the Mortgagee must also upload into P260:
• all Parts of form HUD-27011;
• the Closing Disclosure or similar legal document for post-foreclosure sales;
• the appraisal;
• appraisal invoices;
• a worksheet reflecting the Mortgagee’s application of the CAFMV. The worksheet must include the CAFMV adjustment percentage provided in the instructions on FHAC, any amount paid by the Mortgagee over the credit bid necessary to acquire the Property at CAFMV at the foreclosure sale, and where applicable, the state-mandated foreclosure price; and
• a third-party service fee invoice for auction services, if applicable.