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d. Claim Documentation (04/10/2025)
The Lender must fully document the insurance claim file and include originals of all signed documents in the submission package. These documents include, but are not limited to the:
• Servicing Agreement, if applicable;
• loan application;
• Note;
• Notice to Borrower of HUD’s Role;
• security instrument;
• Note assignment;
• assumption agreement; and
• form HUD-56002-MH, Placement Certificate for Manufactured Home.
i. 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.
• The obligation has not been satisfied, paid, or canceled.
• The documentation provided is sufficient to enforce the obligation.
• The Loan will be repurchased, at any time, if HUD is unable to enforce the obligation.
ii. Repossession Legal Notices
The claim file must contain copies of all necessary legal notices sent regarding the repossession and sale of the Manufactured Home. Any proof related to the delivery of such notices should also be included.
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IV. CLAIMS AND DISPOSITION C. Title I Claims
2. Title I Claims for Manufactured Homes
iii. Bankruptcy and Probate
In the case of Bankruptcy or death of a Borrower, the claim file must contain all related official notices and documents. Required documentation includes a copy of any proof of claim or other documents filed by the Lender to protect its rights.
iv. Recourse Agreement
The Lender must exercise any right they have under a recourse agreement to have a Dealer repurchase the loan Note prior to filing a claim. If the Lender is unable to enforce the recourse agreement, the claim file must adequately document that enforcement was not possible.
Any recourse must first be used to reimburse the Lender for any of its losses on its 10 percent not covered by federal insurance. Any amounts remaining would offset any claim amount the Lender would make to FHA. FHA would not receive any of the recourse funds.
v. Assignment of Lenders’ Rights to the United States
(A) Note Assignment
The claim package must include an assignment of the Lender’s entire interest in the loan Note to the United States. The assignment of the loan Note must be completed in the following format:
All rights, title, and interest of the undersigned are hereby assigned (without warranty, except that the loan qualifies for insurance) to the United States of America (HUD).
(Financial Institution) _____________________
By: ___________________________________
Title: __________________________________
Date: __________________________________
(B) Assignment of Security Instrument
In most cases, Lenders will not assign the security instrument to HUD. Instead, Lenders must repossess and attempt to resell the Manufactured Home before submitting a claim to HUD.
If the Lender obtained a Judgment against the Borrower(s), or obtained additional security for the Loan beyond the minimum security required by HUD, then the Judgment, or other security held by the Lender, must be assigned to the United States. The document for such assignment(s) must be in a format that meets the requirements
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IV. CLAIMS AND DISPOSITION C. Title I Claims
2. Title I Claims for Manufactured Homes
of the local jurisdiction or recording authority. The assignment must identify HUD as the assignee and the FHA Title I case number.
The security assignment must be recorded prior to filing the insurance claim and the original recorded assignment document must be included in the claim package. If the Lender submitted the security assignment for recording in a timely fashion, but cannot provide the recorded document with the claim package due to delay at the recorder’s office, or other circumstances beyond the Lender’s control, the Lender must still file its claim prior to the claim filing deadline. Instead of the recorded assignment, the claim package must include the following documents:
• a copy of the executed, unrecorded assignment;
• reasonable evidence that the assignment was sent for recording before the expiration of the claim filing period. Reasonable evidence includes a copy of the dated check used to pay the local recorder, a dated receipt from the local recorder for the recording fees, or proof of mailing (e.g., certified slip, green card) of assignment to local recorder; and
• a statement signed by an authorized official of the Lender stating:
o the copy of the executed assignment is a true and exact copy of what was
sent to the recorder’s office;
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; and
o the Lender will promptly forward the lien assignment to HUD upon
receipt of the recorded copy.
(C) 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.