source:
  type: guide
  id: hud-4000-1-iv-b-foreclosure-by-other-lien-holder
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Foreclosure
    by Other Lien Holder (05/09/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Foreclosure
    by Other Lien Holder (05/09/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iv-b-foreclosure-by-other-lien-holder-full
  canonical_id: hud-4000-1-iv-b-foreclosure-by-other-lien-holder-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part IV — b. Foreclosure
    by Other Lien Holder (05/09/2022)
  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 IV — b. Foreclosure
      by Other Lien Holder (05/09/2022)
    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: 'b. Foreclosure by Other Lien Holder (05/09/2022) If another
      lien holder starts a foreclosure action against the Property that secures a
      Title I Loan, the Title I Lender must monitor the proceedings and participate
      as necessary to preserve its rights. HUD does not require that the Title I Lender
      bid at a foreclosure sale or acquire title to the Property. The Lender may submit
      a claim if the Title I Loan is in Default and otherwise eligible before, or
      after, the foreclosure action is completed. If the Title I Lender elects to
      bid at a foreclosure sale to acquire title to the Property, then the Lender
      is “proceeding against the loan security” and the requirements outlined above
      will apply. If the foreclosure action is completed prior to the Title I Lender
      submitting a claim to HUD, the Lender must determine if excess funds exist after
      foreclosure, and document that determination in the case binder. If excess funds
      are available, the Lender must take IV. CLAIMS AND DISPOSITION D. Title I Disposition
      2. Property Disposition of Manufactured Homes Handbook 4000.1 1687 Last Revised:
      11/26/2025 appropriate action to obtain them. The case binder must contain copies
      of all notices sent to the Title I Lender and document the Lender’s actions.'
  judgment: false
