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n. Method and Notification of Payment (05/09/2022)
The Debt Collection Improvement Act directs federal agencies to disburse funds via Electronic Funds Transfer (EFT).
i. Electronic Funds Transfer
In order to receive claim payments, the Lender must have completed the SF 3881 form, ACH Vendor/Miscellaneous Payment Enrollment.
To wire payments to a Lender’s bank account, HUD must receive a completed SF 3881 form. Processing this form takes several weeks as does testing through the Federal Reserve System. It is advisable for a Lender to have the form on file with HUD before filing a claim. The form can be obtained from the FOC. Lenders must mail the completed SF 3881 form to the address on the form.
ii. Notification and Identification of Payment
Upon claim payment, a record will be attached to each EFT payment that includes the FHA case number and the Lender’s loan number reported to HUD when the Loan was first reported for insurance. Details of the claim status and claim payment of a Loan can be found online using FHAC.
iii. Lender Responsibilities after Insurance Claim Payment
The Lender must not attempt to collect money from the Borrower, including the coinsurance loss, after a claim is paid. Since the loan Note is assigned to the United States, the Lender has no basis from which to make demand upon a Borrower.
The Lender must promptly refer any inquiries or communications from the Borrower or others regarding the Loan to HUD’s FOC. Lenders must also submit all legal notices, correspondence, or payment to HUD’s FOC.
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IV. CLAIMS AND DISPOSITION C. Title I Claims
2. Title I Claims for Manufactured Homes