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Claims Frequently Asked Questions

Form HUD-27011, Single Family Application for Insurance Benefits, is a representation of the data fields used for all submissions of disposition claims for conveyances, Single Family Loan Sale program claims, supplementals, claim without conveyance of title (CWCOT), and preforeclosure sale claims.  It also represents data fields used when submitting loss mitigation claims for special forbearance incentives; loan modification incentives and reimbursable expenses; and partial/subordinate claim note amounts and incentives.

With the exception of supplemental claims (claim type 05) which must be submitted in manual format, claim types may be submitted using Electronic Data Interchange (EDI) or the Claims Input feature of the FHA Connection (FHAC), according to the following:   

Claim Type EDI FHAC Paper Claim Package

01-A Conveyance

Yes Yes Yes - $100 paper processing fee deducted from claim proceeds

01-B Conveyance

Yes Yes Yes - $100 paper processing fee deducted from claim proceeds

02 A + B, Single Family Loan Sale

Yes No No
05 A+B Supplemental No No Yes - (no processing fee)
06 A+B Yes No Yes - $200 paper processing fee deducted from claim proceeds
07 A+B Yes Yes Yes - $200 paper processing fee deducted from claim proceeds

Question 1 - When using the partial claim loss mitigation tool and advancing funds to reinstate the delinquent loan, what date should be entered into Block 8 (Due date last complete installment paid) of Form HUD-27011?

Answer - Enter the date the last complete installment paid was due, not the date it was paid by the Borrower. The Mortgagee may refer to the payment ledger for this information. If no payments have been made, enter the date in Item 7 (Due Date of First Payment to Principal and Interest). Note that the date in this Item will always be the first of the month. See 4000.1 SF Housing Policy, Claim Filing Technical Guide, 7 Loss Mitigation Home Retention Incentive Claims.   

Question 2 - If a mortgagee qualifies a mortgagor for a Special Forbearance and the loan is later cured using a Loan Modification, may the mortgagee receive an incentive payment for each loss mitigation tool used?

Answer - Yes. The Mortgagee may not file more than one SFB-Unemployment incentive claim per Default due to the Borrower's unemployment. See 4000.1 FHA Single Family Housing Policy, Sec. III.A.2.k.iv 

Question 3 - If a mortgagor submits his/her monthly payments as scheduled but fails to return an executed Special Forbearance - Unemployment Agreement, can the mortgagee file for a Special Forbearance-Unemployment incentive claim?

Answer - No.  The mortgagee must file an incentive claim within 60 days of the date the Special Forbearance agreement was executed. Under these circumstances, the mortgagee does not have a Special Forbearance agreement executed by the mortgagor, so the mortgagee cannot file a SFB incentive claim. See 4000.1 FHA Single Family Housing Policy, Sec. III.A.2.k.iv

Question 4 - When must the mortgagee file a claim for a FHA-HAMP Loan Modification incentive payment?

Answer - HUD must receive a correct and complete claim submission of Parts A and B via FHAC within 60 Days of the execution date of the FHA-HAMP Loan Modification agreement or the incentive claim will not be processed. See: See 4000.1 FHA Single Family Housing Policy, Sec. IV.A.2.h If it is received late, the mortgagee is not eligible for reimbursement of the allowable expenses or the incentive fee Under these circumstances, mortgagees are required to report such non-incentivized loan modifications using the FHA Connection. See 4000.1 FHA Single Family Housing Policy, Sec. III.A.2.k.iv.q

Question 5 - What is the timeframe for filing a supplemental claim? 

Answer -  HUD must receive a supplemental claim within six (6) months of the date of final settlement for Conveyance claims (claim type 01) or full settlement for all other claim types to be eligible for review and, as applicable, reimbursement.  See HUD Handbook 4000.1

Question 6 - When must mortgagees self-curtail?

Answer - Mortgagees are responsible for self-curtailment on claims when reasonable diligence, eviction initiation, 120 days from vacancy and/or Single Family Default Monitoring System reporting requirements are not met.  Mortgages must enter the curtailment date in Block 31 (Mortgagee reported curtailment date) on Form HUD-27011. See ML 16-13. 

If the mortgagee determines during its quality control review that it failed to self-curtail when submitting the claim, it should remit overclaimed amounts to HUD through the Claim Remittance feature in FHA Connection.  This feature can be accessed through the FHA Connection by selecting Single Family FHA, then Single Family Servicing, then Claims Processing, then Claim Remittance, and then Remit Single Family Claim 

Question 7 - Where can mortgagees find information about suspended claims?

Answer - Mortgagees may obtain claim status for all claim types on the FHA Connection by making the following selections: Single Family FHA - Single Family Servicing - Claims Processing - Claims Status. Additionally, for claims submitted via EDI (electronic data interchange), HUD returns a transaction set 820 (paid claim) or 824 (suspended claim) to the servicing mortgagee which sent the claim. Suspended claims error messages can also be obtained on the FHA Connection by making the following selections: Single Family FHA - Single Family Servicing - Claims Processing – Suspended Claim Error Messages. Suspended Claim documentation should be provided by use of the Suspended Claim dashboard in P260.  

Question 8 - Can a claim be submitted without a paper Mortgage Insurance Certificate (MIC)?

Answer - Yes.  The requirement to submit the MIC or a MIC transmittal sheet when filing claims for FHA mortgage insurance benefits was rescinded by ML 2005-11.

Question 9 - What is the proper methodology for listing HUD's Section 235 subsidy payment when filing a claim through FHA Connection?

Answer - The mortgagee must suspend the Section 235 subsidy upon initiation of foreclosure on a Section 235 loan, and any subsidy received during the mortgagor's delinquency should be applied to the mortgagor's account. See Handbook 4330.1, Ch 10. 

Question 10 - Company A, an FHA-approved mortgage company, sells a portfolio of FHA-insured loans to Company B, also an FHA-approved mortgage company, and retains servicing rights.  May Company A file claims from this portfolio in its own name (and later forward those proceeds to Company B), or must Company B file claims these claims as the new holder of record?

Answer - Either the servicer (Company A) of record or the new holder of record (Company B) of the mortgage loan may submit the claim.  The claim must be signed by an official of the organization submitting the claim.  (See ML 2014-03 for a discussion of electronic signatures).  In either case, the FHA single family insurance claim proceeds will be disbursed to the new holder (Company B) of the mortgage, as listed in Item 12, Holding Mortgagor (Payee), on Form HUD-27011.  Except for special forbearance incentive payments that go to the servicer, FHA mortgage insurance proceeds are disbursed to the holder of record at the time the claim is filed and approved for payment.  See Handbook 4330.4, Ch.1; ML 2005-11 and ML 2003-17. 

Question 11 - Does HUD disburse the incentive payment for Special Forbearance claims, Claim Type 31, to the holder of record or to the servicer?

 AnswerHUD disburses the incentive fee payment for Special Forbearance claims directly to the servicer, as identified in Block 13, Servicing Mortgagee Number, on Form HUD-27011.  This is the only claim type for which HUD disburses the proceeds to the servicer; proceeds for all other claim types are disbursed to the holder of record. See ML 2005-11 and ML 2003-17.

Question 12 - When filing incentive claims for Loan Modifications and Partial Claims, should the mortgagee break out attorney fees and foreclosure costs separately on the claim forms?

Answer - No. 
For Loan Modifications, attorney fees and foreclosure costs related to the modification may now be capitalized into the modified principal balance.  For Loan Modification claims, enter the new modified amount to Part A, Block 15(b), and enter any allowable Title Search Fee incurred to Part B, line 113.   
For Partial Claims, attorney fees and foreclosure costs may be included in the Partial Claim subordinate note amount. For Partial Claims, enter Partial Claim note amount, including any capitalized amounts, in Part B, line 107. See 4000.1 SF Housing Policy, Claim Filing Technical Guide, 7 Loss Mitigation Home Retention Incentive Claims.  See ML 2008-21.