www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 September 29, 1994 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER MORTGAGEE LETTER 94-44 TO: ALL APPROVED MORTGAGEES ATTENTION: SERVICING MANAGERS (SINGLE FAMILY) SUBJECT: Claims Instructions for FHA-Insured Home Equity Conversion Mortgages (HECMs) This Mortgagee Letter provides instructions (see Attachment) to mortgagees for completing the "Single-Family Application for Insurance Benefits," Form HUD-27011, for FHA-insured Home Equity Conversion Mortgages (HECMs). This Mortgagee Letter should be used in conjunction with HUD Handbook 4330.4, "FHA Single Family Insurance Claims" issued in November 1992. Any questions on the attached instructions should be directed to the Single Family Claims Support Service Center at (703) 235-9102. Attachment __________________________________ Assistant Secretary for Housing- Federal Housing Commissioner INSTRUCTIONS CLAIMS ON HOME EQUITY CONVERSION MORTGAGES (HECMs) These instructions describe how to prepare and submit the claim form, "Single Family Application for Insurance Benefits," Form HUD-27011, for Home Equity Conversion Mortgages (HECMs) insured under Section 255 of the National Housing Act. These instructions should be read in conjunction with the current edition of HUD Handbook 4330.4, FHA Single Family Insurance Claims. SECTION I -- GENERAL 1.PROGRAM DESCRIPTION. HECMs are designed for elderly homeowners who wish to convert the equity in their homes into income. At origination of the HECM, the lender must choose either the assignment option or the shared premium option. Under the assignment option, the lender may assign the HECM to HUD when the loan balance reaches 98 percent of the maximum claim amount. Under the shared premium option, the lender shares part of the default risk and keeps part of the mortgage insurance premium. In addition, under this "shared premium" option, the mortgagor and the mortgagee can agree at origination that the mortgagee will receive a fraction of any appreciation in the value of the property that occurs during the life of the HECM. See the current edition of HUD Handbook 4330.1 for instructions on servicing of HECMs. (24 CFR Part 206.) 2.TYPES OF HECM CLAIMS. The Department of Housing and Urban Development (HUD) requires that Form HUD-27011 be used for all types of single family mortgage insurance claims (except assignment of undivided interest claims). The five types of HECM claims and their respective uses are: Type 20 - Demand Assignment; Type 21, Foreclosure or Deed-in-lieu; Type 22, Optional Assignment; Type 23, Mortgagor's Sale; and Type 24, HECM Supplemental. A.Type 20 - Demand Assignment: As determined by the Secretary, the mortgagee is unable or unwilling to fulfill the terms of the agreement with the mortgagor, in particular, by failing to make a required payment to or on behalf of the mortgagor. Specific claim instructions are in Section II, Paragraphs 7 through 13. B.Type 21 - Foreclosure or Deed-in-lieu: The mortgagee acquires title to the property by foreclosure or a deed in lieu of foreclosure and disposed of the property in a manner which is not sufficient to satisfy the debt, or a party other than the mortgagee is the successful bidder and purchases the property at foreclosure for an amount insufficient to satisfy the debt. Specific claim instructions are in Sec. III, Par. 14 - 18. 2 C.Type 22 - Optional Assignment: This is only for mortgages insured under the assignment option. The principal balance, including accrued interest and MIP, equals or exceeds 98 percent of the maximum claim amount. See the current edition of Handbook 4330.1 for full requirements for exercising the assignment option. Specific claim instructions are located in Section IV, Paragraphs 19 through 25. D.Type 23 - Mortgagor's Sale: The mortgagor or the mortgagor's estate sells the property and the mortgagee releases the title to facilitate the sale, but the sales proceeds are not sufficient to satisfy the debt. Specific claim instructions are in Section V, Paragraphs 26 through 30. E.Type 24 - HECM Supplemental: This is to correct a previous HECM claim or to claim an item omitted in a previous claim. Instructions are in Section VI, Paragraph 31. 3.DEFINITIONS. Unless otherwise noted, the following definitions are applicable throughout these instructions: Expression Definition 24 CFR Title 24 of the Code of Federal Regulations (for the Department of Housing and Urban Development) AssessmentA special assessment by a public body or a cooperative housing corporation or a condominium or homeowners association. Contract of The agreement evidenced by the Insurance issuance of a mortgage insurance certificate. 24 CFR Part 206, Subpart C (Sections 206.101 through 206.133) covers contract rights and obligations for HECM mortgages. Part 206 incorporates certain provisions of 24 CFR Part 203, which is the rule (regulations) for mortgages insured under Section 203 of the National Housing Act. Due Date As used with regard to HECMs, this means the date when the mortgagee notifies the Secretary that the mortgage became due and payable, or, if applicable, the date the Secretary granted approval for the mortgage to become due and payable. (24 CFR 206.129(d)(1)) FHA Federal Housing Administration in HUD. FNMA Federal National Mortgage Association GNMA Government National Mortgage Association HIP Hazard Insurance Premium HUDDepartment of Housing and Urban Development Insured Mortgage A mortgage which has been insured by FHA as evidenced by the issuance of a Mortgage Insurance Certificate (MIC). Local HUD Office The HUD Office in whose jurisdiction a mortgaged property is located for purposes of the Single Family Loan Management function. Maximum Claim Under the FHA HECM program, this Amount is the lesser of the appraised value of the property or the maximum dollar amount for an area established by the Secretary for a one-family residence. It is indicated on the Conditional Commitment issued by HUD. (206.3 and 206.129(b)) MIC Mortgage Insurance Certificate MIP Mortgage Insurance Premium MortgageA first lien on real estate recognized by the jurisdiction where the real estate is located. Reimbursement For Type 21 claims, this is: cut-off date 1) the date of the deed conveying the property to the successful third-party foreclosure sale bidder; 2) the date within six months of the mortgagee's acquisition on which the mortgagee disposes of the property in accordance with FHA HECM requirements; 3) if the mortgagee does not sell the property within six months of its acquisition, the date six months after the 3 mortgagee's acquisition. S/F Single Family SectionSection of the National Housing Act or of Title 24 of the Code of Federal Regulations (24 CFR) SecretaryThe Secretary of the Department of Housing and Urban Development 4.CLAIM PAYMENT - GENERAL PROVISIONS. Except for debenture interest payable on a claim, every HECM claim is subject to the "maximum claim amount" established at origination. This means that HUD will not pay more than the maximum claim amount on any HECM for the principal plus allowable expenses. In the specific instructions below for each claim type are details on computing the amount of the claim. Provisions for damage and neglect also apply. (Sections 206.123 through 206.129) 5.CURTAILMENT OF INTEREST. The instructions for each type of claim application require the mortgagee to take certain actions within specified time periods. On a Demand assignment, if the mortgagee does not assign the mortgage to the Department within 30 days of HUD's demand letter, the mortgage insurance will be terminated (See Section 206.133). Otherwise, according to HUD regulations, if any of these time requirements is not met, the debenture interest allowance will be curtailed as of the date the mortgagee first became late (see Section 206.129(d)(2)(iii), (e)(2), and (f)(2)). However, an extension of time may be approved by HUD, in writing. This means that if a required action is not taken within the time allowed (extended or not), HUD will compute the interest owed to the mortgagee only to the date that action should have been taken or to which it was extended. 6.PROVISIONS FOR DAMAGE AND NEGLECT. 1. (Section 206.129(e)(3).) In the settlement of the mortgage insurance claim, the mortgagee is responsible for property damaged due to fire (with certain limitations), earthquake, flood, tornado, hurricane or the mortgagee's failure to take action to protect and preserve a vacant or abandoned property. 2. If, upon assignment of the mortgage or sale of the property by the mortgagor or, for a Type 21 claim, on the reimbursement cut-off date, the property has damage due to any of the causes itemized in paragraph 1 above, there will be deducted from the insurance benefits HUD's estimate of 4 the cost to repair the damage or the amount of any insurance recovery received by the mortgagee, whichever is greater. The deduction for fire damage will be limited to the amount of insurance recovery if the mortgagee certifies that the conditions of 24 CFR 203.379 (b) relating to cancellation or reduction of insurance coverage are met. The mortgagee must request from the local HUD office HUD's estimate of the cost of repairing the damage for which the mortgagee is responsible in accordance with 24 CFR 203.379. HUD's estimate must be entered in Item 27, and Item 24 must be marked "Yes". 3. The mortgagee is not responsible for damage (such as that due to mortgagor waste) resulting from causes other than those itemized above. However, in the event the property is vacant or abandoned and repairs are necessary to protect and preserve the property until assignment of the mortgage to HUD or other disposition of the property, the mortgagee must preserve and protect the property; the cost of any such repairs (within the cost limits provided by the local HUD office) should be entered in Part C of the claim. If the property is damaged only by these other causes, Item 24 must be marked "No" and the nature of the damage and the reason for denial of responsibility must be explained in the Mortgagee's Comments section, Part A. SECTION II -- DEMAND ASSIGNMENT 7.DEMAND ASSIGNMENT - TYPE 20. As discussed below, in paying the claim, HUD will deduct from the total indebtedness all claimed accrued interest, including that which has been added to the principal, and HUD will also deduct its estimate of the administrative expense it will incur on account of being made mortgagee. (Section 206.129(e)(3)) A.Time Requirements. When assigning a mortgage to HUD under the Secretary's demand, the mortgagee must comply with the following time requirements (Sections 206.121(b) and 206.127(c)): 1.If the property is damaged due to fire, flood, earthquake, tornado, hurricane or mortgagee neglect as explained herein, the mortgagee should, promptly after receiving HUD's demand, request the local HUD office to provide the mortgagee with HUD's estimate of the cost to repair such damage in accordance with 24 CFR 203.379. 2.File the mortgage assignment for record within 30 calendar days after the date of the HUD demand 5 letter. (See below for "Assignment requirements".) NOTE: Failure to comply with HUD's demand will result in termination of the FHA mortgage insurance. This deadline may not be extended. 3.Simultaneously with the assigning of the mortgage for record, perform the following actions: a.Submit title evidence to the local HUD Office, (Attention: Field Counsel) and request a title approval letter. (See below in the part on "Title evidence.") b.If the property securing the mortgage is damaged, a letter must also be attached to the title evidence certifying that the conditions under 24 CFR 203.379(a) or (b) concerning unavailability of full fire insurance coverage have been met (see "Provisions for Damages or Neglect" below). c.The title evidence must include reference to the original first and second security instruments, including the first note endorsed to HUD; a copy of the assignment to HUD that was submitted for recordation; copies of all intervening assignments; and the mortgagee's original mortgage title policy evidencing that the first mortgage loan is the first lien of record. NOTE:The original recorded assignment must be sent to the local HUD Office, ATTENTION: Field Counsel, as soon as it is received from the recording authority. 4.No later than 15 days after receipt of the title approval letter, file the mortgage insurance claim by sending the following to the appropriate address (see Handbook 4330.4, paragraph 1-2): a.The completed Form HUD-27011, Parts A and B (originals); b.the original MIC, and c.the original title approval letter. 5.These documents must be sent to the appropriate address at HUD Headquarters within 15 calendar days from the date of the title approval letter or 6 by such later date as the local HUD office has approved in a written extension. In addition, if these documents are not received at HUD Headquarters by ten days after the due date (extended or not) for sending them, the mortgagee will be considered late in submitting the claim. 6.On the same date the above claim forms and documentation are sent to HUD Headquarters, send the following documents to the local HUD Office, ATTENTION: Single Family Loan Management. a.Form HUD-27011, Parts A and B (Copies 1) and Parts C, D and E (Originals). b.Copy of the title approval letter. c.Original of all hazard insurance policies on the property and a copy of the notice to every insurance carrier requesting that HUD be named as beneficiary in the mortgagee clause. d.Copy of the last tax bill paid. e.Copy of the firm commitment. f.All payment records. g.Letter in which the mortgagee certifies that the requirements of 24 CFR 203.379(b) have been satisfied (see "Provisions for Damage or Neglect" below). h.Any additional information that HUD may require. B.Extension Of Time Requirements. A request on Form HUD-50012 for an extension of time within which to submit title evidence or file the mortgage insurance claim must be submitted to the local HUD Office, ATTENTION: Single Family Loan Management. See Paragraph 1-6 of Handbook 4330.4. 8.HAZARD INSURANCE POLICY. The provisions of Paragraph 3-9 in Handbook 4330.4 on Type 02 claims apply. (Section 206.127(c).) 9.ASSIGNMENT REQUIREMENTS. The requirements of Paragraph 3-4 of Handbook 4330.4 apply. (Section 206.127(c).) 7 10.TITLE EVIDENCE. The provisions of Paragraph 3-5 of Handbook 4330.4 apply. (Section 206.127(c).) 11.CLAIM PAYMENT - DEMAND ASSIGNMENTS, TYPE 20. (24 CFR 206.129(e)(3). HUD will pay, subject to the maximum claim amount, in one lump sum, 100 percent of the unpaid loan balance less: 1) all accrued mortgage note interest claimed by the mortgagee, 2) HUD's estimate of HUD's administrative expense of being mortgagee, 3) any funds and receivables held by the mortgagee on account of the mortgage and not applied against the principal, and 4) any adjustment for damage and neglect for which the mortgagee is responsible (see below, "Condition of Property at Assignment," Paragraph 12). The "unpaid loan balance" should include all payments (except interest) made and all allowable expenses (including MIP) accrued by the mortgagee through the date of assignment. The claim in the case of the Secretary's demand shall include reimbursement only for the payments actually made to or on behalf of the mortgagor and shall not include accrued mortgage note interest, regardless of whether or not such has been included in the principal. 12.CONDITION OF THE PROPERTY AT ASSIGNMENT. A. Provisions for Damage and Neglect. See Paragraph 6, above. B.Protection and Preservation of Properties. When a mortgage is assigned, the property is usually occupied by the mortgagor and not subject to protection and preservation requirements. There may be occasions, however, where the property is vacant or abandoned at the time of, or prior to, assignment of the mortgage. A vacant or abandoned property must be protected and preserved while it is in the possession of the mortgagee so that it will not be damaged at the time of assignment. A prudent mortgagee will protect and preserve such property to avoid potential damage to the property and surcharges to the claim. HUD will reimburse the mortgagee for required preservation and protection costs within locally established limits when these expenditures are adequately documented. See Chapter 2 of the current edition of HUD Handbook 4330.4, FHA Single Family Insurance Claims, for detailed requirements. 13.COMPLETING THE CLAIM FORM. A.Part A, Application Instructions. Item 1 Claim type - Place "20" in box for claim type 8 "other," or check "20" if available. Items 2 and 3 FHA Case Number and Section of Act Code - The FHA Case Number format is illustrated below, including the Section of the Act (SOA) ADP code. The format of each FHA insured case number appears on the mortgage insurance certificate. XXX-XXXXXX or XXX-XXXXXXX XXX or XXXX FHA Case No. SOA ADP Code Item 4 Default Reason Code. See the list of default codes below in the instructions for filling in Item 4 for Type 21 claims (Foreclosure or Deed-in-lieu). For this Type 20 claim (Demand assignment), code "15" for "Other" will be typical. If "15" is entered, indicate in the "Mortgagee comments" section that this is a Demand Assignment of a HECM. Item 5 Endorsement Date (from MIC) - Enter the endorsement date that appears on the mortgage insurance certificate. Item 6 Date Form Prepared - Enter the date this form is completed. Item 7 Due Date of First Payment of Principal and Interest - Not applicable. Item 8 Due Date Last Complete Installment Paid. Enter the last day of the month in which the mortgagee made the last advance under the mortgage. Item 9 Date of Possession and Acquisition of Marketable Title - Not applicable. Item 10 Date Deed or Assignment Filed for Record or Date of Closing or Appraisal - Same as for Type 02 claims, discussed in Chapter 3 of Handbook 4330.4. Item 11 Date of Foreclosure Proceedings - Not applicable. Item 12 Holding Mortgagee's Number (Payee) - Enter complete 10-digit mortgagee number. NOTE:This number determines the payee's name and address to which the 9 insurance benefits check is mailed. Item 13 Servicing Mortgagee's Number - Enter complete 10-digit servicer's number. NOTE:This number determines the name and address to which all computer-generated letters and claim payment data are mailed. Information will be mailed to the holding mortgagee if this item is not completed. Item 14 Mortgagee's Reference Number - Enter loan number (maximum 15-digits) used by the mortgagee for identifying case. This number will be printed on the claim payment check. This item is optional unless the mortgagee is FNMA or GNMA, in which case the loan number must be entered. Item 15 Original Mortgage Amount - Not applicable. Item 16 Holding Mortgagee EIN - Employee Identification Number. Item 17 Unpaid Loan Balance as of Date in Block 8 - Enter total of payments made, as of the date in Item 10, not Item 8, to or on behalf of the mortgagor but excluding all interest that has accrued since origination of the mortgage. This should include all advances and accrued expenses such as MIP. See the current edition of HUD Handbook 4330.1 for instructions on capitalizing payments under HECMs. Item 18 Date of Firm Commitment - This date should be taken from the firm commitment document, Form HUD-92900.4. Item 19 Expiration Date of Extension of Foreclose/Assign - Not applicable, as no extensions are allowed on Demand Assignment HECM claims. Item 20 Date of Notice/Extension to Assign - Not applicable. Item 21 Date of Release of Bankruptcy - Not applicable. Item 22 Is Property Vacant? Yes or No - Check the appropriate box. Item 23 Not applicable. Item 24 Is Property Conveyed Damaged? Yes or No - For Items 24 through 27, enter the pertinent 10 information as of the date the mortgage is assigned. (See Paragraph 12.) Item 25 If Item #24 is "Yes," Date of (a) Local HUD Office Approval (Pursuant to 203.379(a)) or (b) Certification (Pursuant to 203.379(b)) - Enter the date of the mortgagee's certification letter. Attach a copy of the certification letter to Part A (copy 1), which is sent to the HUD Office. See "Provisions for Damages and Neglect" in Par. 12. Item 26 Type of damage. If more than one type of damage, check the type that caused the greatest damage. Item 27 Recovery or Estimate of Damage - A figure must be entered here if Item #24 is "Yes". Enter the greater of HUD's estimates to repair the damage (obtained from the local HUD Office) or the amount of the insurance recovery. If the insurance recovery is not received when this item is completed, an estimate must be entered. Item 28 through 31 Not applicable. Item 32 Schedule of Tax Information - Furnish all the information requested in this chart in accordance with the instructions for this Item 32 in Chapter 3, "Assignments" of Handbook 4330.4. Item 33 Mortgagor's Name and Property Address - Enter the social security number of the mortgagor and co-mortgagor, if any, above each mortgagor's name. Enter the name of the mortgagor as it appears on the ledger record. Enter the property address as it appears on the security instrument or the mortgage insurance certificate. Item 34 Brief Legal Description of the Property - Enter a brief description of the property. This information is found on the mortgage, which should agree with the deed. Item 35 Name and Address of Mortgagee (Include Zip Code). Enter the appropriate information. Item 36 Name and Address of Mortgagee's Servicer (Include Zip Code) - Complete this item if applicable. Include the name and telephone number of a contact person who can answer questions about the claim. Items 37 and 38 Mortgagee's Official Signature, Date and Title - Signature, date and title are 11 required in the appropriate block. If the holding mortgagee is filing claim, then Item #37 must be completed. If a servicer is filing claim on behalf of a mortgagee, then Item #38 must be completed. If the form is not signed, it will be returned, payment will be delayed. Item 39 Amount of Monthly Payment to: Enter the information for items a, b and c. Use "(d) Interest & Principal" for regular monthly cash to mortgagor for a term or tenure HECM. Item 40 If Bankruptcy Filed, Enter Date - Enter applicable information, if any. Item 41 If Conveyed/Assigned Damaged, Date Damage Occurred (Relates to Items #24 Through #27) - Enter the date the property was damaged. An estimated date will suffice if the exact date is not known. The local HUD Office may require additional documentation, such as a fire report, to support this information. Item 42 Date HIP Canceled or Refused, if Applicable - If Item #24 is checked "Yes", this Item must be completed. Item 43 Number of Living Units - Enter the number of living units. Item 44 Status of Living Units - (Same as for Conveyance claim. See Handbook 4330.4.) Mortgagee's comments, if any. For Line of Credit loans, state the amount, date and interest rate for each payment. Also indicate any partial prepayments. B.Part B, Fiscal Data Instructions. Item 100 Mortgagor's Name and Property Address - See instructions for Part A, Item #33. Items 101 - 103 Same as in Items 2, 3 and 14 of Part A. Item 104 Date Form Prepared - Enter the date this form is completed and submitted to HUD. Item 105 Expiration Date to Submit Title Evidence, if Applicable - Not applicable, as delay by the mortgagee in submitting the title evidence to the 12 HUD field office would not affect the amount payable in this claim. Item 106 Check if Supplemental - Not applicable. Item 107 Adjustment to Loan Balance (if Different from Block #17 on Part A) - Not applicable, since Part B is submitted along with Part A. Item 108 Sale/Bid Price or Appraisal Value (for Coinsurance or Nonconveyances) - Not applicable. Item 109 Escrow Balance - Enter the total amount of cash and accounts receivable held by the mortgagee on account of the mortgage. Items 110 through 121 Not applicable. Item 122 Mortgage Insurance Premiums (from line 311, Part D) - Not applicable. All MIP should be included in the unpaid principal balance, Item 17. Item 123 Not applicable. Item 124 RESERVED FOR FUTURE USE. ANY AMOUNT APPEARING ON THIS LINE WILL BE DISALLOWED. Items 125 through 132 Not applicable. Item 133 Contact Name and Telephone Number of Holding Mortgagee; Contact Name and Telephone Number of Servicing Mortgagee - Enter the name of a person in the holding mortgagee or servicer's office who can answer questions concerning the information reported on this claim form. Items 134 and 135 Enter the Totals of Columns A Deductions, and Column B - Additions. Item 136 Not applicable. Item 137 Net Claim Amount (Column B - A) - The Net claim amount paid by HUD may differ from that calculated by the mortgagee due to possible reimbursement to the Secretary for the administrative expense of HUD's being mortgagee. Items 138 and 139 Mortgagee's Official Signature, Date and Title (Signature not Necessary if Signed by Servicer) and Servicer's Signature, Date and Title - At least one signature is required. 13 C.Parts C, D and E - Support Documents. Not applicable on a Demand Assignment HECM claims. Only the unpaid principal (less interest) is reimbursable; all MIP to the date of filing the assignment should already be included in that amount. SECTION III. FORECLOSURE OR DEED-IN-LIEU 14.FORECLOSURE OR DEED-IN-LIEU - TYPE 21 - As noted above, the term "due date" as used with regard to HECMs means the date when the mortgagee notifies the Secretary that the mortgage became due and payable, or, if applicable, the date the Secretary granted approval for the mortgage to become due and payable. (Section 206.129(d)(1)) A.Time Requirements. Regarding a claim involving foreclosure or a deed-in-lieu, the mortgagee must comply with the following time requirements (Sections 206.27(c), 206.125, and 206.127(a)(b)): 1.Notice to appraise the property must be sent to the local HUD office at the time the mortgagor is sent the notice that the mortgage is due and payable. If the property has damage for which the mortgagee is responsible (due to fire (with certain limitations), flood, earthquake, tornado, hurricane or mortgagee neglect) which will be uncorrected upon foreclosure, the notice to HUD should state such and request HUD's estimate (in accordance with 24 CFR 203.379) of the cost to repair that damage. 2.Institute foreclosure proceedings or other actions to acquire the mortgaged property within three months from the date giving notice to the mortgagor that the mortgage is due and payable, unless an extension of time is approved in writing by the HUD field office. However, if the laws of the State in which the property is situated do not permit the commencement of the foreclosure within three months from the date of the notice to the mortgagor that the mortgage is due and payable, the mortgagee must commence foreclosure within three months after the expiration of the time during which such foreclosure is prohibited by such laws. 3.Provide a written notice to HUD that foreclosure has been instituted. This notice must be provided to the local HUD Office within 30 calendar days of the start of foreclosure. The mortgagee must exercise reasonable diligence in prosecuting the foreclosure proceedings to completion. 14 4.Submit the notice of the mortgagee's acquisition of title to the local HUD Office within 15 calendar days of the mortgagee's acquisition of good and marketable title to the property. A copy of the notice shall be included in the audit file. 5.Take possession of, repair as necessary (see Paragraph 16, below), and sell the property for an amount not less than the appraised value within six months after the date of acquisition of marketable title, except that HUD may authorize in writing a lower sale price (Section 206.125(g)(1)). If the mortgagee repairs damage for it is responsible, obtain an updated appraisal from HUD (at the mortgagee's expense) to establish a new minimum sales price. NOTE: CONFLICT OF INTEREST: The mortgagee shall not enter into a contract for the preservation, repair or sale of the property with any officer, employee, owner of ten percent or more interest in the mortgagee, or with any other person or organization having an identity of interest with the mortgagee or with any relative of such officer, employee, owner or person. (Section 206.125(g)(3)) 6.If the property is not sold within six months, notify the local HUD Office at least 15 calendar days prior to the expiration of the six-month period. If the property has damage for which the mortgagee is responsible (due to fire, flood, earthquake, tornado, hurricane or mortgagee neglect), the notice to HUD should state that and request HUD's updated estimate of the cost to repair that damage. A copy of the notice, if applicable, shall be included in the audit file. The local HUD Office will provide the appraised amount (and repair estimate) that must be used when the mortgagee files the claim for mortgage insurance benefits and the property has not been sold. 7.Complete all parts of the Form HUD-27011 within 15 calendar days after the sale of the property, or within 15 calendar days of receipt of the notice of the appraised value for properties not sold within six months after the date of the acquisition or marketable title. B.Extension Of Time Requirements. If the mortgagee cannot comply with the time requirements for a 15 particular action because of circumstances beyond its control, it should submit a request for an extension of time to the local HUD Office. If the mortgagee fails to take any of the actions in the required time (or within such further time as may be approved by HUD in writing), and in a manner satisfactory to HUD, the debenture interest allowance in the cash payment of the claim will be computed to a date not later than the date on which the particular action should have been taken or to which it was extended. 15.HAZARD INSURANCE POLICY. Paragraph 2-12 of Handbook 4330.4 applies; however, instead of "date deed to the Secretary is filed for record," understand "reimbursement cut-off date" (defined above). (Section 206.129(d)(2)(i)) 16.CONDITION OF THE PROPERTY. A.Provision for Damage and Neglect: 1.See Paragraph 6 above. 2. If the mortgagee chooses to dispose of the property by means of FHA-insured or VA-guaranteed financing, it may make such repairs as are necessary to meet the requirements of the FHA or VA financing or are required by local law (Section 206.125(g)(2)). However, some or all of these expenditures might not be reimbursable by HUD -- see Paragraph 17, below. 3. The mortgagee may repair any or all damage for which it is responsible (that is, damage due to fire, flood, earthquake, tornado, hurricane and mortgagee neglect). However, the amounts to be entered in Items 27 and 108 of the claim form must reflect the property's condition when it is sold (or the six-month period of the mortgagee's ownership has elapsed). B. Preservation and Protection: Upon becoming responsible for possession of the property, the mortgagee should take possession of and preserve the property. In the current edition of HUD Handbook 4330.4, FHA Single Family Insurance Claims, the provisions on "Protection and Preservation of Properties" in the chapter on Conveyance (Type 02) claims apply. 17.CLAIM PAYMENT. (24 CFR 206.129(d)) Subject to the maximum claim amount, HUD will pay: 100 percent of the unpaid loan balance (including mortgage note interest to the "due date"); plus allowable costs incurred up to the "reimbursement cut-off date" (including expenses for preservation and protection as allowed for conveyance, Type 16 02, claims but not any additional repair costs, such as to make the property eligible for FHA or VA financing); less the sale, appraised or redemption price; less an allowance for funds held by the lender; and, less adjustment for damage or neglect for which the mortgagee is responsible. In the case of a sale by the mortgagee within six months of acquisition, the claim settlement may also include expenses in connection with the sale of the property. In addition, HUD will pay to the mortgagee, without limitation by the maximum claim amount, an amount equal to the debenture interest that would have been earned on the portion of the settlement paid in cash, from the "due date" (Section 206.129(d)(1)) to the date such payment is made. In addition, mortgagees are entitled to debenture interest allowance on eligible expenses from the date of the expenditure (but not earlier than the due date) to the date of settlement. However, debenture interest will be curtailed in the event the mortgagee fails to meet an applicable requirement within the specified deadline. In addition, HUD will not reimburse the mortgagee for otherwise allowable expenses incurred after the reimbursement cut-off date, which (as defined in the Introduction to these instructions) for this claim type is: 1) the date of the deed conveying the property to the successful third-party foreclosure sale bidder; 2) the date within six months of the mortgagee's acquisition on which the mortgagee disposes of the property in accordance with FHA HECM requirements; 3) if the mortgagee does not sell the property within six months of its acquisition, the six-month anniversary of the mortgagee's acquisition. To obtain the amount of debenture interest due on an expenditure listed on Part D, multiply the daily interest rate factor (see Charts in Appendix IV in Handbook 4330.4) by the amount paid. Multiply this result by the number of days (see Charts in Appendix V of Handbook 4330.4) from the date of the expenditure to (but not including) the date this form is prepared (Item 104). See "debenture interest" calculation. Total the "amount paid" and "debenture interest" columns. NOTE:If the net claim would result in a negative amount, a claim need not be filed. In these cases, Form HUD-2344 should be completed to cancel FHA insurance. 18.COMPLETING THE CLAIM FORM. A.PART A - APPLICATION INSTRUCTIONS 17 Item 1 Claim Type - Check the box for "21" or place "21" in the box for "other." Items 2 and 3 FHA Case Number and Section of Act Code. XXX-XXXXXX or XXX-XXXXXXX XXX FHA Case No. SOA ADP Code Item 4 Default Reason Code. Enter the appropriate code number from the reasons listed below to explain why the foreclosure or deed-in-lieu occurred: If code "15 - Other" is used, explain the reason on the reverse of Part A under "Mortgagee's Comments." CODE REASON 01 = Death of a principal mortgagor 02 = Illness of a principal mortgagor 03 = Illness of mortgagor's family member 04 = Death of mortgagor's family member 05 = Marital difficulties 06 = Curtailment of income (reduction of income of a borrower 07 = Excessive obligations - same income, including habitual nonpayment of debts 08 = Abandonment of property 09 = Distant employment transfer 10 = Neighborhood problem 11 = Property problem 12 = Inability to sell property 13 = Inability to rent property 14 = Military service 15 = Other - explain in Mortgagee's Comments section 18 Item 5 Endorsement Date (from MIC) - Enter the endorsement date that appears on the mortgage insurance certificate. Item 6 Date Form Prepared - Enter the date the form is prepared and submitted to HUD. Item 7 Due Date of First Payment to Principal and Interest - Not applicable. Item 8 Due Date Last Complete Installment Paid - Enter the last day of the month in which the mortgagee made its last advance under the mortgage, including mortgage note interest and MIP. Item 9 Date of Possession and Acquisition of Marketable Title - Enter the date the mortgagee or third-party bidder obtained good marketable title. Item 10 Date Deed or Assignment Filed for Record or Date of Closing or Appraisal - If the mortgagee acquired the property, enter date of closing of the sale by the mortgagee, or, if the mortgagee did not sell the property within six months of acquisition, enter the date six months after the mortgagee's acquisition. Item 11 Date Foreclosure Proceedings (a) Instituted or (b) Date of Deed in Lieu - If box "a" is checked, enter the date the first legal action is taken to foreclose (for example, the filing of a complaint or the publication of notice of sale). See Appendix 6 of Handbook 4330.4. If a bankruptcy proceeding nullified any such first action to foreclose, enter the date of the instance of the first legal action that resulted in the successful foreclosure. Item 12 Holding Mortgagee Number (Payee) - Enter complete 10-digit mortgagee number furnished by HUD. NOTE:This number determines the payee's name and address to which the insurance benefits check is mailed. Item 13 Servicing Mortgagee Number - Enter complete 10-digit servicer's number. NOTE:This number determines the name and address to which all computer generated letters and claim payment data are mailed. Information will be mailed to 19 the holding mortgagee if this item is not completed. Item 14 Mortgagee's Reference Number - Enter loan number (maximum 15-digits) used by mortgagee for identifying case. This number is printed on the benefits check. This item is optional unless the holding mortgagee is FNMA or GNMA, in which case the FNMA loan number or the GNMA pool number must be entered. Item 15 Original Mortgage Amount - Not applicable. Item 16 Holding Mortgagee EIN - Not applicable. Item 17 Unpaid Loan Balance as of Date in Block 8 - Enter the final mortgage balance. In the current edition of HUD Handbook 4330.1, see the provisions on capitalization of payments and interest in the chapter on HECM for instructions on determining the principal balance. However, the unpaid loan balance should include mortgage note interest only to the due date (defined above). This is an exception to the rule that interest may be posted only on the last day of a month. This amount may also include FHA MIP through the date of extinguishment of the mortgage (otherwise, the MIP for the final month belongs in Item 311). Item 18 Date of Firm Commitment - This date should be taken from the firm commitment document, if available. Debenture interest rate is determined by the firm commitment date or the date of endorsement, whichever yields the higher rate. If the firm commitment date is not available, leave this item blank. Item 19 Expiration Date of Extension to Foreclose/Assign - If a request for an extension of time was requested by the mortgagee and granted by the local HUD Office, enter the expiration date of that extension. Item 20 Date of Notice/Extension to Convey - Not applicable. Item 21 Date of Release of Bankruptcy, if Applicable - If a bankruptcy stay or State or local law delayed the initiation or completion of foreclosure, enter the date of release of such action. Item 22 Is Property Vacant? Yes or No - Not applicable. 20 Item 23 If Item #22 is "No," Date of Local HUD Office Approval - Not applicable. Item 24 Is Property Conveyed Damaged? Yes or No - See Par. 16. Indicate "Yes" if the property had damage for which the mortgagee is responsible. Consider only the damage as of the "reimbursement cut-off date" (defined above in this chapter). Item 25 25.a. is not applicable. Fill in 25.b. if applicable. Item 26 Enter the appropriate information. Item 27 Recovery or Estimate of Damage - A figure must be entered here if Item #24 is "Yes". Enter the greater of HUD's estimates to repair the damage (obtained from the local HUD Office) or the amount of the insurance recovery. If the insurance recovery is pending but not yet received when this item is completed, an estimate must be entered. Item 28 Is Mortgagee Successful Bidder? Yes or No - Check one. This question must be answered. If the property was redeemed, answer should be "No." Item 29 Not applicable. Item 30 Authorized Bid Amount - Enter the bid amount required by HUD. Item 31 Date of Conditional Commitment - Enter the date of conditional commitment. Item 32 Schedule of Tax Information - Not applicable. Item 33 Mortgagor's Name and Property Address - Enter the social security number of the mortgagor and co-mortgagor. Enter the name of the mortgagor as it appears on the ledger record. Enter the property address as it appears on the security instrument or the Mortgage Insurance Certificate. Item 34 Brief Legal Description of Property - Enter a brief description of the property. This information is found on the mortgage and should agree with the deed. Item 35 Name and Address of Mortgagee - Enter the name and address of the mortgagee, including the ZIP Code. Item 36 Name and Address of Mortgagee's Servicer (Include 21 ZIP Code) - Complete this item if applicable. Items 37 and 38 Mortgagee's Official Signature, Date and Title, and Servicer's Signature, Date and Title - Signature, date and title are required in the appropriate block. If the holding mortgagee is filing claim, then Item #37 must be completed. If a servicer is filing claim on behalf of a mortgagee, then Item #38 must be completed. If both are blank, the claim will be returned, a payment will be delayed and probable curtailment of interest will occur. Item 39 Amount of Monthly Payment to: (a) FHA Insurance, (b) Taxes, (c) Hazard Insurance, and (d) Monthly Cash to Mortgagor. Not applicable. Item 40 If Bankruptcy Filed, Enter Date - Enter the date the last bankruptcy action was filed. This is required if Item 21 is completed. Items 41 through 44 Not required. Mortgagee's comments, if any - Give any appropriate clarifying information. HUD's comments, if any - HUD USE ONLY. B.Part B, Fiscal Data Instructions. Prepare this sheet after completing the Support Documents on Parts C, D, and E. Item 100 See instructions, Part A, Item 33. Items 101 and 102 See instructions, Part A, Items 2 and 3. Item 103 See instructions, Part A, Item 14. Item 104 Date Form Prepared - Enter the date this form is prepared and submitted to HUD. Item 105 Expiration Date of Title Approval Extension, if Applicable - Not applicable. Item 106 Not applicable. Item 107 Adjusted Loan Balance (if Different from Block 17 on Part A) - Not applicable. Item 108 Sale/Bid Price or Appraisal Value - Enter in the space provided the foreclosure sales price, 22 redemption price, the mortgagee's disposition sales price or the appraised value, as applicable. Item 109 Escrow Balance - Enter the total of funds held by the mortgagee on account of the mortgage and not applied to reducing the principal balance. Item 110 Total Disbursements for Protection and Preservation from Line 264, Part C - Enter the total amount of disbursements (that are not included in the amount in Item 17 of Part A) and debenture interest appearing in Part C, Item 264. Note on the reverse side of this Part any authorization obtained from the local HUD Office for approvals to exceed allowable amounts. Item 111 Total Disbursements from Item 305, Part D - Enter the total amount paid and debenture interest appearing in Part D, Item #305. Item 112 Attorney/Trustee Fees Paid from Line 306, Part D - Enter the total amount paid and debenture interest appearing in Part, Item 306. HUD WILL CALCULATE THE TWO-THIRDS ALLOWANCE FOR BOTH EXPENSES AND INTEREST. Item 113 Foreclosure, Acquisition, Conveyance, and other Costs from Line 307, Part D - Enter the total amount paid and debenture interest appearing in Part D, Item 307. HUD WILL CALCULATE THE TWO-THIRDS ALLOWANCE FOR BOTH EXPENSES AND INTEREST. Item 114 Bankruptcy Fee (if Applicable) from Line 310, Part D - Enter the amount of bankruptcy fees paid and debenture interest appearing in Part D, Item 310. HUD WILL CALCULATE THE TWO-THIRDS ALLOWANCE FOR BOTH EXPENSES AND INTEREST. Item 115 Rental Income - Not applicable. Item 116 Rental Expense - Not applicable. Item 117 Total Taxes on Deed from Line 308, Part D - Enter the total amount paid and the debenture interest shown in Item 308, Part D. Item 118 Recovery or Damage - Not applicable, as Item 27 will have this. Item 119 Estimate of Recovery from Part A Less Total of Insurance Recovery Adjusted Amount - Not applicable. 23 Item 120 Special Assessments (DO NOT USE FOR COINSURANCE) from Line 309, Part D - Enter the total amount paid and debenture interest which appear in Item 309, Part D. Item 121 Mortgage Note Interest (Assignments, Coinsurance, and Special Forbearance Agreements Only) - Not Applicable. Item 122 Mortgage Insurance Premium - Enter the amount shown on line 311 of Part D for MIP and debenture interest. Items 123 and 124 Not applicable. Item 125 Overhead Cost - Not applicable. Item 126 Uncollected Interest (Approved Forbearance Agreements Only) - Not applicable. Item 127 Amount due From Buyer at Closing or at Appraisal Notice date (From Line 406, Part E) - Enter the appropriate amount. Item 128 Amount Owed to Buyer at Closing or at Appraisal Notice Date (From Line 407, Part E) - Enter the appropriate amount. Item 129 Additional Closing Costs at Settlement - Not applicable. Item 130 Appraisal Fee - Enter total from Line 409, Part E, if applicable. Item 131 Not applicable. Item 132 Not applicable. Item 133 Contact Name and Telephone Number: Holding Mortgagee or Servicing Mortgagee - See instructions for Part C, Items 265 and 266. Please include the holding mortgagee number which you entered in Item 12 of Part A. Items 134 through 136 Enter the Totals of Columns A - Deductions, B - Additions and C - Interest. Item 137 Net Claim Amount - (Columns B - A + C). Enter the amount based on the mortgagee's calculations. HUD's calculation may result in a different amount. 24 Items 138 and 139 Mortgagee's Official Signature, Date and Title (Signature not Necessary if Signed by a Servicer) or Servicer's Signature, Date, and Title - See instructions for Part A, Items 37 and 38. C.Part C, Support Document Instructions. Part C must be completed and its original copy attached to Copy 1 of Part B and the original of Part D, and mailed to the local HUD office. Part C (copy 1) is attached to the original of Part A for submission to HUD Headquarters. Another copy should be retained by the mortgagee. Allowable actual expenditures not added to the unpaid principal may be entered on Part C as they occur; however, debenture interest should be calculated only up to the date of claim submission (except when the mortgagee is self-curtailing the claim); the interest allowance will be computed from the date of expenditure (but not before the "due date") to the date on which Part B, Fiscal Data, is filed. NOTE:The claim must not contain, either as part of the unpaid principal balance or in Part B, any expenditure incurred after the reimbursement cut-off date (defined above). If the local HUD Office instructs the mortgagee to perform a specific service after that date, make a notation under "Mortgagee comments" on Part C. Item 200 Mortgagor's Name and Property Address - See instruction for Part A, Item 33. Items 201 and 202 FHA Case Number and Section of Act Code - See instructions for Part A, Items 2 and 3. Item 203 Mortgagee's Reference Number - See instructions for Part A, Item 14. Item 204 Date - Enter the date Part B is prepared and submitted to HUD Headquarters. Completion of this item should be delayed until Part B, Item 104 is determined. Item 205 Debenture Interest Rate - Using the debenture interest rate provided in Appendix III of Handbook 4330.4, determine the rate at the date of firm commitment and the rate at the date of endorsement, then enter the higher rate. See Item 18, above. Items 206 through 261 Disbursements for protection and 25 preservation. (See Paragraph 16.) Same as for Conveyance claims, Type 01. See Chapter 2 of Handbook 4330.4; the provisions of Paragraph 2-11 ("Protection and Preservation of Properties") apply. To compute debenture interest, follow the instructions for Items 206 to 261 in Chapter 2 ("Conveyances"). Items 262 and 263 Subtotals - If the second page of Part C is used to list protection and preservation costs, add amount paid in debenture interest columns, and transfer the subtotals to Item 263. Item 264 TOTALS - Total the "amount paid" and "debenture interest" columns. Enter the totals on Part B, Item 110. Column C when completing Part B, Fiscal Data. Items 265 and 266 Contact: Holding mortgagee, name and telephone number, or Contact: Servicing mortgagee, name and telephone number - Enter the name of a person in the holding or servicing mortgagee's office who can answer questions concerning the information reported on this claim form. Items 267 and 268 Mortgagee's Official Signature, Date and Title (Not Necessary if Signed by Servicer) or Servicer's Signature, Date and Title - A signature must appear in at least one of these blocks; however, it is acceptable if both the mortgagee and the servicer wish to sign this form. oMortgagee's Comments, if any - Use this area to justify extremely large expenditures, as well as to provide other information required by these instructions. oHUD Comments, if any - For HUD's use only. D.Part D, Support Document (Continuation 1) Instructions. Part D must be completed and the original attached to Parts A, B (copy 1), C, and E (originals) and mailed to the local HUD Office. Part D (copy 1) is retained by the mortgagee for audit purposes. If requested, the audit copy and supporting documents must be forwarded to HUD. Include the appropriate amount of debenture interest for each entry. After the information has been completed and verified, transfer the required data to Part B. 26 Items 300 and 301 FHA Case Number and Section of Act Code - See instructions for Part A, Items 2 and 3. Item 302 Mortgagee's Reference Number - See instructions for Part A, Item 14. Item 303 Debenture Interest Rate - See instructions for Part C, Item 205. Item 304 Date - Enter the date Part B is prepared and submitted to HUD. See Item 104. Item 305 Disbursements for HIP, taxes, ground rents and water rates, eviction costs and other disbursements not shown elsewhere - Only five types of disbursements belonging in Item 305 are allowed for Type 21 HECM claim: 1) taxes, ground rent and water rates that are liens prior to the mortgage; 2) hazard insurance premiums on the mortgaged property not in excess of the "reasonable rate" as defined in Paragraph 2-12 ("Hazard Insurance") of Handbook 4330.4; 3) charges for the administration, operation, maintenance or repair of community-owned property; 4) charges for the maintenance and repair of the mortgaged property paid by the mortgagee with respect to which it certifies to HUD that payment was made for the purpose of discharging an obligation arising out of a covenant filed for record and approved by HUD prior to the insurance of the mortgage; and 5) charges for the repair of the mortgaged property required by and in an amount authorized by HUD in accordance with Paragraph 2-11D.6 of HUD's claims handbook, 4330.4, except that instead of "conveyance," understand the earlier of the mortgagee's sale of the property or the end of the six-month period. Item 306 Attorney/Trustee Fees - Enter amounts paid to the attorney/trustee to vest title to the property in the name of the successful bidder. HUD WILL CALCULATE THE TWO-THIRDS ALLOWANCE FOR EXPENSES. Item 307 Foreclosure and/or Acquisition, Conveyance and Other Costs - Enter amounts paid (other than attorney/trustee fees) to vest title to the property in the name of the successful bidder. Cost of advertising or publishing of notices which are normally required for foreclosure actions or sales are allowed to be entered here. If a deed-in-lieu of foreclosure was obtained, enter the amount paid to the mortgagor, not to exceed $200, 27 here. HUD WILL CALCULATE THE TWO-THIRDS ALLOWANCE FOR EXPENSES. Item 308 Taxes on Deed - Enter the amount paid for taxes imposed upon any deed or other instruments by which the property was acquired by a successful bidder. Item 309 Special Assessments - For each item in this category, enter the date paid, date the lien was attached or would be attached, description, amount paid, and the debenture interest. Item 310 Bankruptcy - Itemize the bankruptcy fees paid and debenture interest due. HUD WILL CALCULATE THE TWO-THIRDS ALLOWANCE FOR EXPENSES AND INTEREST. (24 CFR 203.402) Item 311 Mortgage Insurance Premiums - Itemize MIP disbursements not included in the principal balance, and enter the date paid, period covered, and the amount paid. Include only mortgage insurance premiums due up to the reimbursement cut-off date. E.Part E, Support Document (Continuation 2) Instructions. Part E must be completed and the original, attached to Parts A, B (copy 1), C, and D (originals), mailed to the local HUD Office. Part E (copy 1) is retained by the mortgagee for audit purposes. If requested, the audit copy and supporting documents must be forwarded to HUD. After the information has been completed and verified, transfer the required data to Part B. Items 400 through 402 See instructions, Part A, Items 2, 3, and 14. Item 403 See instructions, Part C, Item 205. Item 404 Date in Part B, Item 104 - Enter the date Part B is prepared and submitted. Item 405 Not applicable. Items 406 through 407 Same as Coinsurance claims (see Chap. 5 of Handbook 4330.4), except that the "appraisal notice date" mentioned in Chapter 5 should be read as the "reimbursement cut-off date" defined above in these instructions. Item 408 Additional closing costs at settlement - Enter additional expenses, if any, incurred in 28 connection with the sale of the property. This may include a sales commission at the rate customarily paid in the community. If the sale to a buyer involved an FHA or VA mortgage, include a discount at a rate not to exceed the maximum allowable by HUD, as of the date of execution of the sales contract, on sales of properties through HUD's Single Family Property Disposition Program in the area of the property. Do not include amounts included elsewhere on the claim, and do not include any amount to pay off any subordinate lien on the property. Item 409 Appraisal Fee - Enter the amount of the fee and the date paid for the appraisal obtained because the mortgagee did not sell the property within six months of acquisition. Items 410, 411 and 412 Not applicable. SECTION IV - OPTIONAL ASSIGNMENT 19.OPTIONAL ASSIGNMENT (TYPE 22). Claims may be filed under this section only if the mortgagee has assigned the mortgage to the Secretary in accordance with the assignment insurance option. See the current edition of Handbook 4330.1 for the requirements for exercising this option. A.Time Requirements. Upon exercising its option to assign a Home Equity Conversion Mortgage to HUD (see "Assignment requirements" below), the mortgagee must comply with the following time requirements (Section 206.127(c)): 1. In the unlikely event that the property, upon the mortgagee's exercise of optional assignment, is damaged by fire, flood, earthquake, tornado, hurricane or mortgagee neglect (and the mortgage nevertheless is eligible for the optional assignment), the mortgagee must obtain HUD's estimate of the cost of that damage for which the mortgagee is responsible, in accordance with 24 CFR 203.379. 2.Send the following to HUD Headquarters: a.Form HUD-27011, Parts A and B (originals). b.The original MIC. c.The Title Submission Certification. 29 NOTE:These documents must be sent to HUD Headquarters within 15 calendar days from the date the mortgage assignment was filed for record (or by such later date in accordance with an extension given by the HUD field office) and must be received at the appropriate address in HUD Headquarters within 10 days after that deadline. If the documents are received at Headquarters more than 10 days after the deadline, the claim will be deemed to have been submitted late. 3.On the same date the above claim form and documentation are sent to HUD Headquarters, send the following documents to the local HUD Office, ATTENTION: Single Family Loan Management. a.Form HUD-27011, Parts A and B (Copies 1) and D (Original). b.Original of all hazard insurance policies (including flood insurance) on the property and a copy of the notice to each insurance carrier requesting that HUD be named as beneficiary in the mortgagee clause. c.Copy of the last tax bill paid. d.All ledger cards and payment records. e.All documents relating to the payment amount or application of the payments. f.Copy of the certification letter concerning property damage. g.Any additional information that HUD may require. B.Extension Of Time Requirements. A request for an extension of time within which to submit title evidence or file the claim must be submitted to the local HUD Office, ATTENTION: Single Family Loan Management. 20.ASSIGNMENT REQUIREMENTS. The instructions in Paragraph 3-4 of Handbook 4330.4 concerning the form of assignment(s) are applicable. (Section 206.127(c)) 21.HAZARD INSURANCE POLICY. The instructions in Paragraph 3-9 of Handbook 4330.4 concerning hazard insurance are applicable. (Section 206.127(c)) 30 22.TITLE EVIDENCE. The instructions in Paragraph 3-5 of Handbook 4330.4 concerning title evidence are applicable. (Section 206.127(c)) 23.CLAIM PAYMENT. (24 CFR 206.129(e)(1) and (2)). Subject to the limitation of the maximum claim amount, HUD will pay the unpaid loan balance (including mortgage note interest through the date of assignment - see Item 17) less any adjustments for funds held by or payable to the mortgagee on account of the mortgage and less adjustments for any damage and neglect (see Par. 24). In addition, HUD may pay, without regard to the limitation of the maximum claim amount, debenture interest from the date of assignment to the earlier of the date of settlement of the claim or the date as of which the mortgagee was delinquent in meeting a time requirement. No expenses, except those already properly included in the principal balance, are reimbursable. 24.CONDITION OF THE PROPERTY AT ASSIGNMENT A. Provisions for Damage and Neglect. See Paragraph 6 above. B.Protection and Preservation of Properties. When a mortgage is assigned, the property is usually occupied by the mortgagor and not subject to protection and preservation requirements. There may be occasions, however, where the property is vacant at the time of, or prior to, assignment of the mortgage. A vacant or abandoned property must be protected and preserved while it is in the possession of the mortgagee so that it will not be damaged at the time of assignment. A prudent mortgagee will protect and preserve such property to avoid potential damage to the property and surcharges to their claim. HUD will reimburse the mortgagee for required preservation and protection costs within locally established limits when these expenditures are adequately documented. See Chapter 2 of the current edition of HUD Handbook 4330.4, "FHA Single Family Insurance Claims," for detailed requirements. 25.COMPLETING THE CLAIM FORM. A.Part A, Application Instructions. Item 1 Claim Type - Place "22" in the box for claim type "Other" or check "22" if available. Items 2 and 3 FHA Case Number and Section of Act Code 31 - The FHA Case Number format is illustrated below, including the section of the Act (SOA) ADP code. The format of each FHA insured Case Number appears on the mortgage insurance certificate. XXX-XXXXXX OR XXX-XXXXXXX XXX FHA Case No. SOA ADP Code Item 4 Default Reason Code - See the list of default codes above in the instructions for filling in Item 4 for Type 21 claims (Foreclosure or Deed-in-lieu). For this Type 22 claim (Optional assignment), code "15" for "Other" will be typical. Indicate in the "Mortgagee comments" section that this is an optional assignment of a HECM. Item 5 Endorsement Date (from MIC) - Enter the endorsement date that appears on the mortgage insurance certificate. Item 6 Date Form Prepared - Enter the date this form is completed and submitted to HUD. Item 7 Due Date of First Payment to Mortgagor - Not applicable. Item 8 Due Date Last Complete Installment Paid - Enter the last day of the month in which the mortgagee made its last advance under the mortgage, including mortgage note interest for the last month or fraction thereof up to the date of assignment. Item 9 Date of Possession and Acquisition of Marketable Title - Not applicable. Item 10 Date Deed or Assignment Filed for Record or Date of Closing or Appraisal - Same as for Type 02 claims: see Chapter 3 of Handbook 4330.4. Item 11 Date Foreclosure Proceedings: (a) Instituted and (b) Date of Deed in Lieu - Not applicable. Item 12 Holding Mortgagee Number (Payee) - Enter complete 10-digit mortgagee number. NOTE: This number determines the payee's name and address to which the insurance benefits check is mailed. Item 13 Servicing Mortgagee Number - Enter complete 10-digit servicer's number. NOTE: This number 32 determines the name and address to which all computer generated letters and claim payment data is mailed. Information will be mailed to the holding mortgagee if this item is not completed. Item 14 Mortgagee Reference Number - Enter loan number (maximum 15 digits) used by mortgagee for identifying case. This number is printed on the benefits check. This item is optional unless the mortgagee is FNMA or GNMA, in which case the FNMA or GNMA loan number must be entered. Item 15 Original Mortgage Amount - Not applicable. Item 16 Holding Mortgagee EIN - Not applicable. Item 17 Unpaid Loan Balance as of Date in Block 8 - Enter the outstanding mortgage balance after crediting the last advance made or expense accrued under the mortgage. See the current revision of Handbook 4330.1 for instructions on capitalizing interest and expenses. However, the mortgagee should include mortgage note interest and allowable expenses and fees (including MIP) through the date in Item 10; this is an exception to the rule that interest is to be posted only on the last day of a month. Item 18 Date of Firm Commitment - This date should be taken from the firm commitment document, if available. Debenture interest rate is determined by the firm commitment date or the date of endorsement, whichever yields the higher rate. If the firm commitment date is not available, leave this item blank. Item 19 Expiration Date of Extension to Assign - Not applicable. Item 20 Date of Notice - Enter the date of the mortgagee's letter to the local HUD Office notifying of the intention to assign. Item 21 Date of Release of Bankruptcy, if Applicable. Not applicable. Item 22 Is Property Vacant? Yes or No - Not applicable. Item 23 If Item 22 is "No," Date of Local HUD Office Approval - Not applicable. Item 24 Is Property Conveyed Damage? Yes or No - Check 33 "Yes" if there is damage to the property securing the assigned mortgage for which the mortgagee is responsible (see Paragraphs 6 and 24). If there is no damage or if the damage to the property is not covered by the above paragraphs, check "No" and specify the type of damage and whether any immediate repairs are needed, on the reverse of Part A under "Mortgagee's comments." Item 25 If Item 24 is "Yes," Date of (a) Local HUD Office's Approval (Pursuant to 203.379(a)) or (b) Certification (Pursuant to 203.379(b)) - Enter the date of the HUD approval letter or the mortgagee's certification letter, whichever is applicable. Attach a copy of the certification letter to Part A (copy 1) which is sent to the HUD Office. Refer to "Provisions for Damages or Neglect" of these instructions. Item 26 Type of Damage - Check appropriate box. If there is more than one type of damage, check the type that accounts for the greatest amount of damage. Do not complete this item if Item #24 is checked "No." Item 27 Recovery or Estimate of Damage - A figure must be entered here if Item #24 is "Yes". Enter the greater of HUD's estimates to repair the damage (obtained from the local HUD Office) or the amount of the insurance recovery. If the insurance recovery is pending but not received when this item is completed, an estimate must be entered. Item 28 Is Mortgagee Successful Bidder? - Not applicable. Item 29 Deficiency Judgment - Not applicable. Item 30 Authorized Bid Amount - Not applicable. Item 31 Date of Conditional Commitment - Not applicable. Item 32 Schedule of Tax Information - Follow the instructions for Item 32 for Assignment-Type 02 claims in Handbook 4330.4. Item 33 Mortgagor's Name and Property Address - Enter the name of the mortgagor as it appears on the ledger record. Enter the property address as it appears on the security instrument or the mortgage insurance certificate. 34 Item 34 Brief Legal Description of Property - Enter a brief description of the property. This information is found on the mortgage, which should agree with the deed. Item 35 Name and Address of Mortgagee. Enter the name and address of the mortgagee, including the ZIP Code. Item 36 Name and Address of Mortgagee's Servicer (Include ZIP Code) - Complete this item if applicable. Item 37 and 38 Mortgagee's Official Signature, Date and Title, and Servicer's Signature, Date and Title - A signature, date and title must appear in at least one of these blocks. It is acceptable if both the mortgagee and servicer wish to sign. If both are left blank, expect a delay in payment and probable curtailment of debenture interest. Item 39 Amount of Monthly Payment - Enter the regular monthly payments to: a. FHA Insurance; b. Taxes; c. Hazard Insurance. In d., enter the amount of the regular monthly payment made to the Mortgagor. Item 40 If Bankruptcy Filed, Enter Date - Not applicable. Item 41 If Assigned Damaged, Date Damage Occurred (Relates to Items 24 Through 27) - Enter the date the property was damaged by fire, natural cause, vandalism, etc. An estimated date will suffice. The local HUD Off ice may require additional documentation, such as fire report, to support the date. Item 42 Date HIP Canceled or Refused, if Applicable - If Item 24 is checked "yes," this item must be completed. Item 43 Number of Living Units - Enter the number of living units. Item 44 Status of Living Units - Indicate if the property is vacant or occupied for each living unit by checking the appropriate box in Item 44a. If the unit is occupied, enter the occupant's name. If the unit is vacant, enter the date vacated (as best as can be determined) in Item 44b and the date the mortgagee secured the property in Item 44c. Mortgagee's comments, if any. For line of credit HECMs, state the amount and date of every payment. Also 35 indicate any partial prepayments. HUD's comments, if any. RESERVED. B.Part B, Fiscal Data Instructions. The mortgagee has 15 calendar days from the date the assignment is filed for record to deliver Part B (original) to HUD Headquarters with Part A (original) a title submission certification, and the original MIC. Forward Part B (copy 1) to the local HUD Office with Part A (copy 1). Item 100 Mortgagor's Name and Property Address - See instructions for Part A, Item 33. Items 101 and 102 FHA Case Number and Section of Act Code - See instructions for Part A, Items 2 and 3. Item 103 Mortgagee's Reference Number - See instructions for Part A, Item 14. Item 104 Date Form Prepared - Enter the date this form is completed. Item 105 Expiration Date to Submit Title Evidence, if Applicable - Not applicable. Item 106 Check if Supplemental - Check this box only if you have received final payment of your claim. Item 107 Adjustment to Loan Balance - Not applicable. Item 108 Sale/Bid Price or Appraisal Value - Not applicable. Item 109 Escrow Balance - Enter the total amount of funds held by the mortgagee on account of the mortgage but not applied to the principal balance. Items 110 through 120 - Not applicable. Item 121 Mortgage Note Interest - Not applicable: note interest to the date of assignment should have been included in the principal balance, Item 17. Item 122 Mortgage Insurance Premiums - Not applicable if all MIP, including for the final month or fraction thereof, is included in the amount in Item 17. Item 123 Unapplied Section 235 Assistance Payments - Not applicable. Items 124 through 132 Not applicable. 36 Item 133 Contact Name and Telephone Number of Holding Mortgagee; Contact Name and Telephone Number of Servicing Mortgagee - Enter the name of a person in the holding mortgagee or servicer's office who can answer questions concerning the information reported on this claim form. Items 134 through 136 Enter the Totals of Columns A - Deductions, B - Additions, and Interest. Item 137 Net Claim Amount (Columns B - A + C) - The net claim amount calculated by the mortgagee may differ from the actual amount HUD pays due to possible interest curtailment or disallowed expenses. Items 138 and 139 Mortgagee's Official Signature, Date and Title (Signature not Necessary if Signed by Servicer) and Servicer's Signature, Date and Title - Enter a signature in at least one of these blocks. C.Parts C, D and E - Support Documents. Parts C, D and E are not required on an optional assignment claim. SECTION V -- MORTGAGOR'S SALE 26.MORTGAGOR'S SALE - TYPE 23 A.Time Requirements. To file this type of claim, the mortgagee must have requested and received from HUD the statement of the appraised value of the property along with HUD's estimate of the cost to repair any damage due to fire, flood, earthquake, tornado, hurricane or mortgagee neglect (in accordance with 24 CFR 203.379, as explained below). When filing this type of HECM claim, the mortgagee must comply with the following time requirements (Section 206.127(b)): 1.Within 15 days after the sales closing, send the following to HUD Headquarters: a.Form HUD-27011, Parts A and B (originals). b.Original MIC. c.Certification of the sale of the property and the sales price. d.Copy of the appraisal supplied by the local HUD office including HUD's estimate of the cost to 37 repair any damage for which the mortgagee is responsible. These documents must be sent to HUD Headquarters within 15 calendar days after a party other than the mortgagee acquires title to the property. If these are not received at HUD Headquarters within 10 calendar days of the deadline for their submission, HUD will consider that they were submitted late. 2.On the same date the claim form and documentation are sent to HUD Headquarters, send the following documents to the local HUD Office, ATTENTION: Single Family Loan Management. a.Form HUD-27011, Parts A and B (copies 1). b.Copy of the certification of sale. c.All ledger cards or payment records. d.All documents which relate to the payment amount or application of the payments. e.Any additional information which HUD may require. B.Extension Of Time Requirements. If the mortgagee cannot comply with the time requirements for a particular action because of circumstances beyond its control, it should submit a request for an extension of time to the Single Family Loan Management staff at the local HUD Office. If the mortgagee fails to take any actions in the required time (or within such further time as may be approved by HUD in writing), and in a manner satisfactory to HUD, the debenture interest allowance in the cash payment of the claim will not be computed beyond the date on which the particular action should have been taken or to which it was extended. 27.HAZARD INSURANCE POLICY. Paragraph 2-12 of Handbook 4330.4 applies, except that "the date of closing of the sale by the mortgagor" should be read in place of "the date the deed to the Secretary is filed for record." (Section 206.129(f)(1)) 28.CLAIM PAYMENT. (24 CFR 206.129(f)) Subject to the maximum claim amount, HUD will pay in one lump sum, 100 percent of the principal balance as of the date of sale, plus any allowable expenses not already included in the principal, less the net sales price (except that pay-offs of subordinate liens may not be included in calculating the 38 "net"), less funds held by the mortgagee, less an adjustment for damage and neglect. Also included are expenses in connection with the sale of the property (if not already reflected in the net sales price). In addition, without regard to the maximum claim amount, HUD will pay to the mortgagee an amount equal to the debenture interest allowance from the date the deed is recorded to the date of claim settlement, except that debenture interest will not be paid to or beyond the date the date the mortgagee was late in meeting a required timeframe. NOTE:If the net claim results in a minus figure, a claim need not be filed. If a claim will not be filed, a completed Form-2344 should be sent to the appropriate address at HUD to cancel the FHA insurance. 29.CONDITION OF THE PROPERTY UPON SALE BY MORTGAGOR. A.Provisions for Damage and Neglect: See Paragraph 6. B. Preservation and Protection: When a property securing a HECM is sold by the mortgagor, it is usually occupied by the mortgagor and not subject to protection and preservation requirements. There may be occasions, however, where the property is vacant at the time of or prior to sale by the mortgagor or the mortgagor's estate. A vacant or abandoned property must be protected and preserved while it is in the possession of the mortgagee so that it will not be damaged at the time of assignment. A prudent mortgagee will protect and preserve such property to avoid potential damage to the property and surcharges to their claim. HUD will reimburse the mortgagee for required preservation and protection costs within locally established limits when these expenditures are adequately documented. See Chapter 2 of the current edition of HUD Handbook 4330.4, "FHA Single Family Insurance Claims," for detailed requirements. 30.COMPLETING THE CLAIM FORM. A.Part A, Form HUD-27011, Application Instructions. Item 1 Claim Type - Check number "23" if provided or place "23" in the box for claim type "other." Items 2 and 3 FHA Case Number and Section of Act Code - The acceptable FHA Case Number format is illustrated below, including the Section of the Act (SOA) ADP 39 codes. The FHA Case Number appears on the Mortgage Insurance Certificate. XXX-XXXXXX or XXX-XXXXXXX XXX FHA Case No. SOA ADP Code Item 4 Default Reason Code. Enter the code to explain why the mortgagor sold the property. If the reason is that the mortgage was due and payable, indicate the reason for such. If code "15 - Other" is used, explain in "Mortgagee's Comments." CODE REASON 01 = Death of a principal mortgagor 02 = Illness of a principal mortgagor 03 = Illness of mortgagor's family member 04 = Death of mortgagor's family member 05 = Marital difficulties 06 = Curtailment of income (reduction of income of a borrower 07 = Excessive obligations - same income, including habitual nonpayment of debts 08 = Abandonment of property 09 = Distant employment transfer 10 = Neighborhood problem 11 = Property problem 12 = Inability to sell property 13 = Inability to rent property 14 = Military service 15 = Other - explain in Mortgagee's Comments section Item 5 Endorsement Date (from MIC) - Enter the endorsement date that appears on the Mortgage Insurance Certificate. 40 Item 6 Date Form Prepared - Enter the date the form is prepared and submitted to HUD. Must be within 15 days of the sale of the property. Item 7 Due date of first payment to principal and interest - Not applicable. Item 8 Due Date Last Complete Installment Paid - Enter the date of the closing of the sale by the mortgagor or the mortgagor's estate. Item 9 Date of Possession and Acquisition of Marketable Title - Not applicable. Item 10 Date Deed or Assignment Filed for Record or Date of Closing or Appraisal - Enter date of the sale of the property. Item 11 Date Foreclosure Proceedings (a) Instituted or (b) Date of Deed in Lieu - If foreclosure was initiated, the date may be entered here, but it is not required. Item 12 Holding Mortgagee Number (Payee) - Enter complete 10-digit mortgagee number which was furnished to each mortgagee. NOTE:This number determines the payee's name and address to which the insurance benefits check is mailed. Item 13 Servicing Mortgagee Number - Enter complete 10-digit servicer's number. NOTE:This number determines the name and address to which all computer generated letters and claim payment data is mailed. Information will be mailed to the holding mortgagee if this item is not completed. Item 14 Mortgagee's Reference Number - Enter loan number (maximum 15 digits) used by mortgagee for identifying cases. This number is printed on the benefits check. This item is optional. Item 15 Original Mortgage Amount - Not applicable. Item 16 Holding Mortgagee EIN - Employer Identification Number. Item 17 Unpaid Loan Balances as of Date in Block 8 (Block 41 11 if Coinsurance) - Enter the outstanding mortgage balance as of the date the sale is closed. This should include all payments made to or on behalf of the mortgagor, all allowable servicing fees, and all accrued mortgage note interest and accrued MIP to the date of sale (this is an exception to the rule of posting interest and MIP only on the last day of each month). See the current edition of Handbook 4330.1 for instructions on capitalizing expenses and interest on HECMs. Item 18 Date of Firm Commitment - This date should be taken from the firm commitment document, Form HUD-92900.4. Debenture interest rate is determined by the firm commitment date or the date of endorsement, whichever yields the higher rate. If the firm commitment date is not available, leave this item blank. Item 19 Expiration Date of Extension to Foreclose/Assign - This date may be entered if it is available, but it is not required. Item 20 Date of Notice/Extension to Convey - Not applicable. Item 21 Date of Release of Bankruptcy - Not required. Item 22 Is Property Vacant? Yes or No - Not required. Item 23 If Item 22 is "No," Date of the Local HUD Office Approval - Not applicable. Item 24 Is Property Conveyed Damaged? - See Paragraphs 6 and 29 above. Indicate whether, as of the date of closing of the sale by the mortgagor or estate, the property was subject to any type of damage for which HUD holds the mortgagee responsible. Item 25 If Item 24 is "Yes," Date of (a) Local HUD Office Approval or (b) Certification (Pursuant to 203.379(a)(2) - Item "a" is not applicable. For "b", give the date of the mortgagee's certification letter. Item 26 Type of Damage - Check the appropriate box. If there is more than one type of damage, check the type that represents the greatest damage. Do not check this if Item 24 is checked "No." Item 27 Recovery or Estimate of Damage - If Item 24 is 42 checked "Yes," enter the greater of HUD's estimate of the cost to repair damage for which the mortgagee is responsible (see "Provisions for Damage and Neglect" above) and the amount of any hazard insurance recovery received by the mortgagee, if any. If an insurance settlement is pending but has not yet been received, use a reasonable estimate. Item 28 Is Mortgagee Successful Bidder? - Not applicable. Item 29 Deficiency Judgment - Not applicable. Item 30 Authorized Bid Amount - If the mortgage was not due and payable when the contract of sale was executed, enter the appraised value of the property. If the mortgage was due and payable at that time, enter the amount equal to 95 percent of the appraised value. Item 31 Mortgagee reported curtailment date - If the mortgagee failed to meet a deadline for a requirement stipulated above, enter the latest date as of which the mortgagee should have completed the action. Item 32 Schedule of Tax Information - Not applicable. Item 33 Mortgagor's Name and Property Address - Enter the Social Security Number of the mortgagor and co-mortgagor, if any, above the mortgagor's name. Enter the name of the mortgagor as it appears on the security instrument or the MIC. Item 34 Brief Legal Description of the Property - Enter a brief description of the property. This information is found on the mortgage which should agree with the deed. Item 35 Name and Address of Mortgagee (Including ZIP Code). - (Same as for a Conveyance claim; see Handbook 4330.4.) Item 36 Name and Address of Mortgagee's Servicer (Including ZIP Code) - Complete this item if applicable. Include the name and telephone number of a contact person who can answer questions about the claim. Items 37 and 38 Mortgagee's Official Signature, Date and Title; Servicer's Signature, Date and Title - Signature, date, and title are required in the 43 appropriate block. If the holding mortgagee is filing claim, then Item 37 must be completed. Item 39 Amount of monthly payment to: a. FHA Insurance, b. Taxes, c. Hazard Insurance, d. Interest and principal. - Not applicable. Item 40 If Bankruptcy Filed, Enter Date - Not applicable. Item 41 If Conveyed/Assigned Damaged, Date Damage Occurred (Relates to Items 24 Through 27) - Not applicable. Item 42 Date HIP Canceled or Refused, if Applicable - Not applicable. Item 43 Number of Living Units - Not applicable. Item 44 Status of Living Units - Not applicable. Mortgagee's comments, if any. State whether or not the mortgage was due and payable when the contract of sale was executed. In addition, use this area to justify unusual circumstances as well as other information required by the instructions. HUD's Comments, if any. - HUD USE ONLY. B.Part B, Fiscal Data Instructions. Item 100 Mortgagor's Name and Property Address - See instructions for Item 33, Part A. Items 101 and 102 FHA Case Number and Section of Act Code See instructions for Items #2 and #3, Part A. Item 103 Mortgagee's Reference Number - See instructions for Item #14, Part A. Item 104 Date Form Prepared - Enter the date this form has been completed AND submitted to HUD. Item 105 Expiration Date to Submit Title Evidence, if Applicable - Not applicable. Item 106 Check if Supplemental - Not applicable. Item 107 Adjusted Loan Balance (if Different from Block 17 on Part A) - Not applicable. Item 108 Sale/Bid Price or Appraisal Value - Enter the 44 contract sales price, except that the amount entered here may not be lower than the appraised value or 95 percent of the appraised value, whichever is applicable. Use Part E for allowable sales expenses. Item 109 Enter the amount of any funds held by the mortgagee on account of the mortgage and not applied to the principal. Item 110 Enter the amounts from Item 264, if any. Item 111 In Item 111, enter the amounts from Item 305. Items 112 - 116 Items 112 though 116 are not applicable. Item 117 Enter the amounts from Item 308. Items 118 and 119 Not applicable. Item 120 Enter the amounts from Item 309. Items 121 through 124 Mortgage Note Interest - Not applicable. Mortgage Insurance Premiums - In Item 122, enter any amounts from Item 311. Items 123 and 124 are not applicable. Items 125 through 129 Not Applicable. Any amounts appearing on these lines will be disallowed. Item 130 Appraisal Fee - Not applicable. Item 131 Deficiency Judgement Costs/Fees - Not applicable. Item 132 Reserved. Item 133 Contact Name and Telephone Number: Holding Mortgagee or Servicing Mortgagee - Please include the Holding Mortgagee's number which you entered in Item 12 of Part A. Items 134 through 136 Enter the Totals of Columns A - Deductions, B - Additions, and C - Interest. Item 137 Net Claim Amount (Columns B - A + C) - The amount HUD actually pays will differ from what the mortgagee enters here because of possible interest curtailments, disallowed expenses, and additional debenture interest calculated by HUD to the date of claim settlement. Items 138 and 139 Mortgagee's Official Signature, Date and 45 Title (Signature not Necessary if Signed by a Servicer) or Servicer's Signature, Date, and Title - See instructions for Part A, Items 37 and 38. C.Part C, Support Document Instructions. Part C must be completed and its original copy attached to Copy 1 of Part B and the original of Part D, and mailed to the local HUD office. Part C (copy 1) is attached to the original of Part A for submission to HUD Headquarters. Another copy should be retained by the mortgagee. Allowable actual expenditures not added to the unpaid principal may be entered on Part C as they occur; however, debenture interest should be calculated only up to the date of claim submission (except when the mortgagee is self-curtailing the claim); the interest allowance will be computed from the date of expenditure (but not before the "due date") to the date on which Part B, Fiscal Data, is filed. NOTE:The claim must not contain, either as part of the unpaid principal balance or in Part B, any expenditure incurred after the reimbursement cut-off date (defined above). If the local HUD Office instructs the mortgagee to perform a specific service after that date, make a notation under "Mortgagee comments" on Part C. Item 200 Mortgagor's Name and Property Address - See instruction for Part A, Item 33. Items 201 and 202 FHA Case Number and Section of Act Code - See instructions for Part A, Items 2 and 3. Item 203 Mortgagee's Reference Number - See instructions for Part A, Item 14. Item 204 Date - Enter the date Part B is prepared and submitted to HUD Headquarters. Completion of this item should be delayed until Part B, Item 104 is determined. Item 205 Debenture Interest Rate - Using the debenture interest rate provided in Appendix III of Handbook 4330.4, determine the rate at the date of firm commitment and the rate at the date of endorsement, then enter the higher rate. See Item 18, above. Items 206 through 261 Disbursements for protection and preservation - Same as for Conveyance claims, Type 02. The provisions of Paragraph 2-11 ("Protection and Preservation of properties") of Handbook 46 4330.4 apply. To compute debenture interest, follow the instructions for Items 206 to 261 in Chapter 2 ("Conveyances"). Items 262 and 263 Subtotals - If the second page of Part C is used to list protection and preservation costs, add amount paid in debenture interest columns, and transfer the subtotals to Item 263. Item 264 TOTALS - Total the "amount paid" and "debenture interest" columns. Enter the totals on Part B, Item 110. Column C when completing Part B, Fiscal Data. Items 265 and 266 Contact: Holding mortgagee, name and telephone number, or Contact: Servicing mortgagee, name and telephone number - Enter the name of a person in the holding or servicing mortgagee's office who can answer questions concerning the information reported on this claim form. Items 267 and 268 Mortgagee's Official Signature, Date and Title (Not Necessary if Signed by Servicer) or Servicer's Signature, Date and Title - A signature must appear in at least one of these blocks; however, it is acceptable if both the mortgagee and the servicer wish to sign this form. oMortgagee's Comments, if any - Use this area to justify extremely large expenditures, as well as to provide other information required by these instructions. oHUD Comments, if any - For HUD's use only. D.Part D, Support Document (Continuation 1) Instructions. Part D must be completed and the original attached to Parts A, B (copy 1), C, and E (originals) and mailed to the local HUD Office. Part D (copy 1) is retained by the mortgagee for audit purposes. If requested, the audit copy and supporting documents must be forwarded to HUD. Include the appropriate amount of debenture interest for each entry. After the information has been completed and verified, transfer the required data to Part B. Items 300 and 301 FHA Case Number and Section of Act Code - See instructions for Part A, Items 2 and 3. 47 Item 302 Mortgagee's Reference Number - See instructions for Part A, Item 14. Item 303 Debenture Interest Rate - See instructions for Part C, Item 205. Item 304 Date - Enter the date Part B is prepared and submitted to HUD. See Item 104. Item 305 Disbursements for HIP, taxes, ground rents and water rates, eviction costs and other disbursements not included elsewhere - Only five types of disbursements belonging in Item 305 are allowed for this type of HECM claim: 1) taxes, ground rent and water rates which are liens prior to the mortgage; 2) hazard insurance premiums on the mortgaged property not in excess of the "reasonable rate" as defined in Paragraph 2-12 ("Hazard Insurance") of Handbook 4330.4; 3) charges for the administration, operation, maintenance or repair of community-owned property; 4) charges for the maintenance and repair of the mortgaged paid by the mortgagee with respect to which it certifies to HUD that payment was made for the purpose of discharging an obligation arising out of a covenant filed for record and approved by HUD prior to the insurance of the mortgage; and 5) charges for the repair of the mortgaged property required by and in an amount authorized by HUD in accordance with Paragraph 2-11D.6 of Handbook 4330.4. Item 308 Taxes on Deed - Not applicable. Item 309 Special Assessments - For each item in this category, enter the date paid, date the lien was attached or would be attached, description, amount paid, and the debenture interest. Item 310 Bankruptcy - Not applicable. Item 311 Mortgage Insurance Premiums - Itemize MIP disbursements not included in the principal balance, and enter the date paid, period covered, and the amount paid. Include only mortgage premiums due up to the earlier of the date of the closing of the foreclosure sale or the date six months after the mortgagee acquired title. E.Part E, Support Document (Continuation 2) Instructions. Part E must be completed and the original, attached to 48 Parts A, B (copy 1), C, and D (originals), and mailed to the local HUD Office. Part E (copy 1) is retained by the mortgagee for audpurposes. If requested, the audit copy and supporting documents must be forwarded to HUD. After the information has been completed and verified, transfer the required data to Part B. Items 400 through 402 See Instructions, Part A, Items 2, 3, and 14. Item 403 See Instructions, Part C, Item 205. Item 404 Date in Part B, Item 104 - Enter the date Part B is prepared and submitted. Item 405 Not Applicable. Items 406 to 407 Same as Coinsurance (see Chap. 5 of Handbook 4330.4), but disregard references to the "appraisal notice date." Item 408 Additional closing costs at settlement - Enter additional expenses, if any, incurred in connection with the sale of the property including a sales commission at the rate customarily paid in the community. If the sale to a buyer involved an FHA or VA mortgage, include a discount at a rate not to exceed the maximum allowable by HUD for that locality, as of the date of execution of the sales contract, on sales of properties through HUD's Single Family Property Disposition Program. Do not include amounts included elsewhere on the claim and do not include any amount to pay off any subordinate lien on the property. Item 409 Appraisal Fee - If the cost of the appraisal to establish the mortgagor's minimum sales price is not already included in the unpaid loan balance and the mortgagee has paid for it, enter that cost here. Items 410 through 412 Not applicable or Reserved. SECTION VI -- HECM SUPPLEMENTAL 31.HECM SUPPLEMENTAL CLAIMS - Type 24. In Item 1, designate a HECM Supplemental claim as "Type 24." Otherwise, follow the instructions in Chapter 7 of Handbook 4330.4 for submission of Supplemental claims. 49