source:
  type: guide
  id: hud-4000-1-iii-t-deficiency-judgments
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency
    Judgments (03/31/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency
    Judgments (03/31/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-t-deficiency-judgments-full
  canonical_id: hud-4000-1-iii-t-deficiency-judgments-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency
    Judgments (03/31/2022)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — t. Deficiency
      Judgments (03/31/2022)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 't. Deficiency Judgments (03/31/2022) Where the mortgaged Property
      is sold at the foreclosure sale for less than the unpaid balance of the debt,
      HUD may seek a deficiency Judgment, unless prohibited by the terms of the Mortgage.
      i. HUD-Required Deficiency Judgments (A) Mortgages Insured on or after March
      28, 1988 For Mortgages insured pursuant to Firm Commitments issued on or after
      March 28, 1988, or pursuant to direct endorsement processing when the Mortgagee’s
      underwriter signed the credit worksheet on or after March 28, 1988, HUD may
      require the Mortgagee to pursue a deficiency Judgment. Where HUD requires the
      Mortgagee to pursue a deficiency Judgment, HUD will provide the Mortgagee with
      instructions and its estimate of the Fair Market Value (FMV) of the Property,
      less adjustments. Upon receipt of such notification, the Mortgagee must: • tender
      a bid at the foreclosure sale in that amount; and • attempt, in accordance with
      state law, to obtain a deficiency Judgment. (B) Mortgages Insured before March
      28, 1988 For Mortgages insured pursuant to Firm Commitments issued before March
      28, 1988, or pursuant to direct endorsement processing when the Mortgagee’s
      underwriter signed the credit worksheet before March 28, 1988, HUD may request
      the Mortgagee to pursue a deficiency Judgment. ii. Procedures for Claims Without
      Conveyance of Title Unless specifically requested by FHA, the Mortgagee is not
      required by FHA to pursue any deficiency Judgments in connection with CWCOT
      procedures. iii. Assignment of Judgments (A) When Filing a Claim for Insurance
      Benefits The Mortgagee must assign deficiency Judgments to HUD and transmit
      the Judgment to HUD no later than 30 Days after the Judgment was obtained if
      the Mortgagee filed a claim for mortgage insurance benefits. (B) When Not Filing
      a Claim for Insurance Benefits The Mortgagee may engage in Judgment collection
      activities if a claim for FHA insurance benefits is not filed. III. SERVICING
      AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages'
  judgment: false
