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b. Claim Documentation (04/10/2025)
The Lender must submit the claim package for insurance benefits using form HUD-637, Title I Claim for Loss. The form must be signed by an authorized officer of the Lender under applicable criminal and civil penalties for fraud and misrepresentation.
The claim package must include all applicable documents listed on form HUD-637.
Claims must be submitted to HUD’s FOC.
i. Standard
The claim submission must contain the original signed documents for:
• Loan Servicing Agreement, if applicable;
• the Note;
• the security instrument;
• assignments;
• assumption agreements;
• releases of liability for repayment of the Loan; and
• any related documents and forms.
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IV. CLAIMS AND DISPOSITION C. Title I Claims
1. Title I Claims for Property Improvement
Additional documents must be provided to enable HUD to (1) evaluate the Lender’s origination, underwriting, and servicing of the Loan; (2) calculate the claim amount; or
(3) continue effectively servicing the Loan.
Electronic signatures are permitted provided they are in compliance with all requirements of the Electronic Signatures in Global and National Commerce (ESIGN) Act, 15 U.S.C. § 7001 et seq. and in accordance with HUD’s policy on electronic signatures.
ii. Missing Document Statement
For missing required documents, the Lender must include in the claim file a Missing Document Statement. The statement must be signed by an authorized official of the Lender and include an explanation as to why the original document is not available. In addition, the statement must also attest to the following:
• The copy is true and correct, if applicable.
• The obligation is valid and enforceable.
• The obligation has not been satisfied, paid or canceled.
• The documentation provided is sufficient to enforce the obligation in the jurisdiction.
• The Loan will be repurchased, at any time, if HUD is unable to enforce the obligation.
iii. Bankruptcy and Probate
If a Borrower has declared bankruptcy or is deceased, the claim file must contain all official notices, copies of any proof of claim or other documents filed by the Lender to protect its rights, and any other relevant documentation.
iv. Assignment of Lenders’ Rights to the United States
Upon filing the insurance claim, the Lender must assign its entire interest in the loan Note (or in a Judgment in lieu of the Note), in any security held, and in any claim filed in probate, bankruptcy or insolvency proceedings, to the United States. If the security interest has been assigned to the United States, the assignment must be recorded prior to filing the insurance claim, unless HUD determines that recordation by the Lender is impractical.
(A) Form of Assignment
The assignment of the loan Note must be completed in the following form:
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IV. CLAIMS AND DISPOSITION C. Title I Claims
1. Title I Claims for Property Improvement
All rights, title, and interest of the undersigned is hereby assigned (without warranty, except that the loan qualifies for insurance) to the United States of America (HUD).
(Financial Institution) _____________________
By: ___________________________________
Title: __________________________________
Date: __________________________________
The assignment of other documents must be in a form that meets the requirements of the local jurisdiction or recording authority.
(B) Valid and Enforceable When Assigned
The loan obligation must be valid and enforceable against the Borrower when assigned to the United States. If HUD has reason to believe that an obligation is not valid or enforceable, the claim may be denied (or HUD may demand repurchase if a claim is already paid). The Lender may resubmit the claim after obtaining a valid and enforceable Judgment for the unpaid balance of the Loan.
(C) Assignment Delay at a Recorder’s Office
The Lender must wait until the recorded assignment is returned from the recorder’s office before sending the claim package to HUD. If there is a delay in receiving the original recorded lien assignment back from the recorder’s office, the Lender must not delay its claim submission to HUD past the Claim Filing Deadline. In this situation, the Lender must send the claim package to HUD with the following documentation in lieu of the original, recorded assignment:
• a copy of the executed, unrecorded assignment;
• reasonable evidence that the assignment was sent for recording before the expiration of the claim filing deadline. Examples of evidence include a check to pay the local recorder, a dated receipt from the recorder, or proof of mailing (i.e., stamped certified mail receipt); and
• a statement signed by an authorized officer of the Lender stating:
o The copy of the executed assignment is a true and exact copy of what was
sent to the recorder.
o The recorded copy of the lien assignment could not be obtained before the
end of the claim filing period due to delays in the recorder’s office.
o The Lender will promptly forward the lien assignment to HUD upon
receipt of the recorded original.
o The Lender will repurchase the Loan at any time if this delay results in
harm to HUD or if the Lender fails to send the recorded lien assignment to HUD in a timely fashion.
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IV. CLAIMS AND DISPOSITION C. Title I Claims
1. Title I Claims for Property Improvement
When the original lien assignment is received from the recorder’s office, it should be identified by the FHA case number (and by the claim number if available) and sent to the FOC.