source:
  type: guide
  id: hud-4000-1-iii-a-servicing-in-compliance-with-law-2
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — a. Servicing
    in Compliance with Law (11/07/2023)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — a. Servicing
    in Compliance with Law (11/07/2023).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-a-servicing-in-compliance-with-law-2-full
  canonical_id: hud-4000-1-iii-a-servicing-in-compliance-with-law-2-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — a. Servicing
    in Compliance with Law (11/07/2023)
  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 — a. Servicing
      in Compliance with Law (11/07/2023)
    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: 'a. Servicing in Compliance with Law (11/07/2023) i. Definition
      The Loan Holder is the Title I Lender who holds title to the FHA insured Loan,
      has the right to enforce the agreement, is responsible for servicing actions
      on Loans, including servicing actions performed by its agent. ii. Standard Lenders
      must ensure all Title I FHA-insured Loans are serviced in accordance with FHA
      requirements and all applicable laws. Lenders must service all FHA-insured Loans
      in accordance with FHA requirements and all applicable laws. III. SERVICING
      AND LOSS MITIGATION C. Title I Insured Programs 1. Title I Property Improvement
      Loan Program Handbook 4000.1 1533 Last Revised: 11/26/2025 Lenders must comply
      with all laws, rules, and requirements applicable to loan servicing, including
      full compliance with the applicable requirements under the purview of the CFPB,
      including RESPA and TILA. Lenders must comply with all antidiscrimination laws,
      rules, and nondiscrimination and equal opportunity statutes, regulations, contract
      provisions, and other requirements applicable to servicing performing FHA-insured
      Loans and FHA-insured Loans in Default, including full compliance with the applicable
      requirements of: • Fair Housing Act, 42 U.S.C. §§ 3601–3619; • the FCRA, 15
      U.S.C. §§ 1681a‒1681x; and • the ECOA, 15 U.S.C. §§ 1691a‒1691f. The Lender
      must make all determinations with respect to the adequacy of the Borrower’s
      income in a uniform manner without regard to race, color, religion, sex, age,
      national origin, familial status, disability, marital status, receipt of public
      assistance, because the applicant has in good faith exercised any right under
      the Consumer Credit Protection Act, or location of the Property. iii. Record
      Retention – Servicing File (A) Definition The Servicing File is the Lender’s
      record of all servicing activity on an FHA-insured Loan. (B) Standard Lenders
      must retain all Servicing Files for a minimum of two years after the transfer
      or sale of the Loan or termination of Title I Loan insurance. The Lender must
      maintain accurate records for each Loan serviced. In addition to the specific
      documentation requirements stated in this Handbook 4000.1, these records must
      include the following information: • loan origination and endorsement documentation,
      • Title I Insurance payments made; and • documentation related to any recovery
      of hazard insurance proceeds. The Lender must also retain, in electronic and
      hard copy, the security instrument when applicable, Note, or a lost note affidavit
      acceptable under state law, with the electronic copy marked “copy.” For cases
      for which a claim is filed, the Lender must retain documentation in compliance
      with the Claim File section for at least seven years after the final claim or
      latest supplemental claim settlement date. III. SERVICING AND LOSS MITIGATION
      C. Title I Insured Programs 1. Title I Property Improvement Loan Program Handbook
      4000.1 1534 Last Revised: 11/26/2025 (C) Record Reconciliations HUD may require
      Lenders to provide information evidencing reconciliation of Lender records with
      HUD. This information may include identification, by Loan, of the following:
      • amount of insurance premium due and paid to HUD by time period for each insured
      Loan; • date insurance was terminated or servicing transferred, if applicable;
      and • date servicing was acquired, for Loan acquired after September 1, 1982.
      All Lenders must ensure that HUD’s records accurately reflect the status of
      the Loan and both the correct holder and servicer of record. (D) Electronic
      Storage Where retention of a hard copy or original document is not required,
      Lenders may use electronic storage methods for all servicing-related documents
      required in accordance with HUD regulations, handbooks, and Title I Letters.
      Regardless, the Lender must be able to make available to HUD in the format (electronic
      or hard copy) requested legible documents within 24 hours of a request or as
      otherwise prescribed by HUD.'
  judgment: false
