source:
  type: guide
  id: hud-4000-1-iv-i-denial-of-insurance-claims
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Denial
    of Insurance Claims (05/09/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Denial
    of Insurance Claims (05/09/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iv-i-denial-of-insurance-claims-full
  canonical_id: hud-4000-1-iv-i-denial-of-insurance-claims-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part IV — i. Denial of
    Insurance Claims (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 — i. Denial
      of Insurance Claims (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: 'i. Denial of Insurance Claims (05/09/2022) HUD may deny a claim
      for insurance in whole or in part based upon a violation of the regulations.
      i. Invalid Debt If the enforceability of the lien can be challenged, the Lender
      can obtain a Judgment against the Borrower and assign the Judgment to HUD. For
      example, improper wording of or method of mailing a legal notice may call into
      question whether a deficiency debt is valid. Acquiring a Judgment will prove
      the validity of the debt. ii. Missing or Incomplete Work Description HUD may
      deny the claim if the supporting documentation regarding the property improvements
      does not include sufficient detail to confirm that the loan proceeds were used
      solely for property improvements (and eligible fees/charges), that the costs
      were reasonable, and that all improvements were eligible. HUD will review the
      Completion Certificate, the inspection report, and any lender noncompliance
      reports in addition to the contract, Work Write-Up, or other written description
      of the proposed improvements. HUD may pay a claim despite a poor work description
      if the inspection confirms that 100 percent of the proceeds went to eligible
      improvements (and eligible fees/charges), but will deny a claim with a poor
      work description and other documentation that indicates misuse of loan proceeds.
      IV. CLAIMS AND DISPOSITION C. Title I Claims 1. Title I Claims for Property
      Improvement Handbook 4000.1 1671 Last Revised: 11/26/2025 iii. Claim Filing
      Past the Deadline If a claim is filed after the Claim Filing Deadline, the Lender
      must request a waiver to document that the late filing was unavoidable. Note
      that a servicing error by the Lender is not considered a valid basis for a waiver.
      iv. Unresolved Borrower Complaints HUD may deny a claim if there are unresolved
      valid borrower complaints against the Dealer or the Lender because a Loan with
      an unresolved complaint may not be valid and enforceable against the Borrower.
      The Lender may resubmit the claim with additional documentation regarding the
      resolution of the complaint or if the Lender obtains a Judgment against the
      Borrower. Obtaining a Judgment against the Borrower will prove the validity
      of the debt. v. Note and/or Assignment Not an Original The Lender must file
      a Missing Document Statement if the Lender cannot locate the original Note and/or
      Assignment of Note. vi. Evidence of Borrower’s Ownership Interest in the Property
      The case binder must contain evidence of the Borrower’s ownership interest in
      the Property. vii. Notice of Default and Acceleration Noncompliance HUD may
      deny the claim when the Notice of Default and Acceleration does not comply with
      requirements. viii. Missing or Incorrect Information on Form HUD-637, Title
      I Claim for Loss The Lender will be notified by the FOC if a revised form HUD-637
      is required due to missing or incorrect information. The revised form must be
      signed by an authorized official of the Lender prior to resubmitting the form
      to HUD.'
  judgment: false
