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2. Title I Claims for Manufactured Homes
Since HUD does not take the Property upon Default, the claim paid by HUD is based on the deficiency balance. HUD requires the Lender to sell the Property prior to submitting a claim and requires the claim payment to be based on the Best Price Obtainable.
If the repossessed Property is not covered by hazard or flood insurance and is subsequently damaged, the Lender bears responsibility for the loss. The appraised value, for claim purposes, will be based on the retail value of comparable homes in undamaged condition, without any deduction for such damage.