Reallocating or Reapportioning a Payment

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Reallocating a Payment

An upfront mortgage insurance premium (MIP) payment can be reallocated from one case to another case in the lender's portfolio. All or part of one payment for one case can be reallocated to up to three other cases. However, reallocation of the entire payment to only one other case is recommended.

The case the payment is being reallocated from is referred to as the source case. The case the payment is being reallocated to is called the destination case.

Reallocations are processed by the Lender Assistance Section of HUD's Single Family Insurance Operations Division (SFIOD). To request a reallocation, send an email to LenderAssistance@hud.gov and include the following in the request:

• Name and ID of mortgagee (enter ID in subject field)
• Reallocate upfront payment (specify in subject field)
• FHA case number of the source case
• FHA case number of the destination case(s)
• Date payment was remitted for the source case
• Amount to be reallocated to each destination case
• Mortgagee contact name including telephone number and fax number (optional)

Reapportioning a Payment

If the total payment amount is accurate for a case but the specified premium, late, and interest amounts are not, the individual amounts can be redistributed (or reapportioned). However, the total amount of the case payment must remain the same.

For example, an upfront MIP payment of $1,800 is required for case endorsement. Since the payment is more than 30 days overdue, a late charge of $150 and an interest charge of $50 is assessed. The total amount owed is $2,000. The lender remits a payment of $2,000 for premium only and does not specify the late and interest amounts. The lender can request the $2,000 payment be reapportioned to the appropriate premium, late, and interest amounts.

To reapportion an upfront MIP payment, send an email request to HUD's Single Family Insurance Operations Branch, Lender Assistance Section at LenderAssistance@hud.gov and include the following in the request:

• Name and ID of mortgagee (enter ID in subject field)
• Reapportion upfront payment (specify in subject field)
• FHA case number
• Date payment was remitted for the case
• Premium, late, and interest amounts to which the payment is to be reapportioned
• Mortgagee contact name including telephone number and fax number (optional)