source:
  type: guide
  id: hud-4000-1-iii-f-claims
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — f. Claims
    (09/28/2024)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — f. Claims
    (09/28/2024).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-f-claims-full
  canonical_id: hud-4000-1-iii-f-claims-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — f. Claims
    (09/28/2024)
  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 — f. Claims
      (09/28/2024)
    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: 'f. Claims (09/28/2024) i. Claim Guidance (A) Claim Not Permitted
      after Satisfaction of a HECM by Payoff A Mortgagee must not file a claim for
      insurance benefits when the HECM is satisfied in full. A bid by any party other
      than the Mortgagee at a foreclosure sale for the full debt, consisting of the
      outstanding HECM balance and any and all other incurred expenses, will result
      in a full Payoff of the HECM. In such cases, the Mortgagee must not file a claim
      for insurance benefits. (B) Contract of Insurance Not Terminated The Mortgagee
      may only file a claim for insurance benefits where the contract of insurance
      has not terminated. (C) Time Frames for Filing Claims (1) Case Numbers Assigned
      before September 19, 2017 The Mortgagee must file a claim within 15 Days of:
      • the Mortgagee selling the Property acquired through foreclosure or DIL; •
      a sale by the Borrower or other party with legal right to dispose of the Property;
      • satisfaction of the HECM by the Borrower’s estate or heir; or • assignment
      of the HECM to the Secretary. (2) Case Numbers Assigned on or after September
      19, 2017 The Mortgagee must file a claim within 30 Days of: • the Mortgagee
      selling the Property acquired through foreclosure or DIL; • a sale by the Borrower
      or other party with legal right to dispose of the Property; or • satisfaction
      of the HECM by the Borrower’s estate or heir. The Mortgagee must file a claim
      within 15 Days of assignment of the HECM to the Secretary. If the Property will
      not be sold within six months from the foreclosure sale date where the Mortgagee
      was the successful bidder, the Mortgagee must file a claim III. SERVICING AND
      LOSS MITIGATION B. Title II Insured Housing Programs Reverse Mortgages 2. Default
      Servicing Handbook 4000.1 1512 Last Revised: 11/26/2025 no later than 30 Days
      after the end of the six-month period. The Mortgagee must use a valid appraisal,
      substituting the appraised value for the sales price of the Property. (D) Claims
      Filed in HERMIT All HECM claims must be filed with supporting documentation
      in HERMIT using the appropriate timeline. The unpaid principal balance of the
      HECM is capped as of the due date. The Mortgagee must itemize all allowable
      expenses incurred after the Due and Payable Date. (E) Claims Limited by Maximum
      Claim Amount (1) Case Numbers Assigned before September 19, 2017 In no case
      may the claim paid exceed the MCA. The interest allowance provided in 24 CFR
      § 206.129(d)(3)(x), (e)(2), and (f)(2)(i) will not be included in determining
      the limit on the claim amount. (2) Case Numbers Assigned on or after September
      19, 2017 In no case may the claim paid exceed the MCA. The interest allowance
      provided in 24 CFR § 206.129(d)(3)(x), (e)(2), and (f)(2)(ii) will be made in
      cash in the amount determined under the regulations and will be included in
      determining the limit on the claim amount. (F) Debenture Interest Rate (1) Definitions
      For purposes of payment of debenture interest, the Date of Default is the Due
      and Payable Date. The Semi-Annual Rate is the rate in effect for debentures
      listed at https://www.hud.gov/hud-partners/housing-debenture-interest-rates.
      The 10-Year CMT Rate is the rate in effect on United States Treasury Securities
      adjusted to a constant maturity of 10 years listed at https://www.hud.gov/hud-
      partners/housing-debenture-interest-rates. (2) Standard (a) Mortgages Endorsed
      before January 23, 2004, Regardless of when a Claim is Filed and Mortgages Endorsed
      on or after January 23, 2004, with a Due and Payable Date prior to September
      19, 2017 The debenture interest rate is the higher of: III. SERVICING AND LOSS
      MITIGATION B. Title II Insured Housing Programs Reverse Mortgages 2. Default
      Servicing Handbook 4000.1 1513 Last Revised: 11/26/2025 • the Semi-Annual Rate
      as of the date the commitment was issued, if applicable; or • the Semi-Annual
      Rate as of the date the Mortgage was endorsed. (b) Mortgages Endorsed after
      January 23, 2004, with a Due and Payable Date on or after September 28, 2024
      The debenture interest rate is the 10-year CMT rate for the month the Mortgage
      became Due and Payable. (3) Debenture Interest Rate Adjustment (a) Definition
      A Debenture Interest Rate Adjustment (DIRA) is a request from the Holder legally
      entitled to receive claim proceeds or their authorized representative for an
      adjustment to the debenture interest rate used to calculate payments for claims
      filed on HECMs that became Due and Payable on or after September 19, 2017, and
      filed prior to September 28, 2024. (b) Standard Mortgagees may request a DIRA
      from January 2, 2025, through July 1, 2025. To request a DIRA, Mortgagees must
      email a request to the FHA Resource Center at answers@hud.gov with the subject:
      DIRA Request. The request must include: • the Holder’s FHA Mortgagee Identification
      (ID); • a designated DIRA contact; • the designated DIRA contact’s phone number
      and email address; and • a certified statement that the Holder is entitled to
      receive claim payment for the indicated HECMs. The certified statement must
      also include the following language: I am an authorized representative of the
      Mortgage Holder for the following FHA Mortgagee ID number: ________. I certify
      that I have the authority to both submit this request and authorize a DIRA for
      [include one of the following]: • all eligible claims filed for the listed Holder
      ID for the time period between September 19, 2017, and September 28, 2024; or
      • the HECMs included in the attached Excel spreadsheet (Attachment 1) for the
      listed Holder ID for eligible claims filed for the time period between September
      19, 2017, and prior to September 28, 2024. III. SERVICING AND LOSS MITIGATION
      B. Title II Insured Housing Programs Reverse Mortgages 2. Default Servicing
      Handbook 4000.1 1514 Last Revised: 11/26/2025 I, the undersigned, certify under
      penalty of perjury that the information provided above is true and correct.
      WARNING: Anyone who knowingly submits a false claim or makes a false statement
      is subject to criminal and/or civil penalties, including confinement for up
      to 5 years, fines, and civil and administrative penalties. (18 U.S.C. §§ 287,
      1001, 1010, 1012, 1014; 31 U.S.C. §§ 3729, 3802). Only one DIRA and one corrective
      DIRA per Holder FHA Mortgagee ID is permitted. A corrective DIRA must be submitted
      no later than 30 Days after the initial DIRA request. Following the time frame
      allowed for submitting a corrective DIRA, HUD will conduct a review to identify
      any difference in the debenture interest paid. HUD will provide the designated
      DIRA contact identified in the DIRA request with the results of the DIRA. If
      the Mortgagee disagrees with the findings of the DIRA, the review decision can
      be appealed by emailing the FHA Resource Center at answers@hud.gov with subject
      line: DIRA Appeal. An appeal must be submitted within 60 Days of the date HUD
      sent the decision to the designated Mortgagee contact. The Mortgagee must include
      documentation in the appeal documenting: • the debenture interest rates the
      Mortgagee believes should have been used to calculate each claim payment; •
      the amount of debenture interest the Mortgagee believes should have been paid
      in each claim payment; • the calculations used to determine the amount of debenture
      interest the Mortgagee believes should have been paid; and • the data source(s)
      the Mortgagee used to make this determination. Following the later of the expiration
      of the appeal period or final determination by HUD on the appeal, HUD will remit
      the amount to the Holder identified in the DIRA request through HERMIT. (G)
      Curtailment of Interest for Noncompliance with HUD HECM Program Requirements
      Causes for curtailment of interest include, but are not limited to, the Mortgagee’s
      failure to: • timely request due and payable approval from HUD within 30 Days
      of the occurrence of a Due and Payable event for which HUD approval is needed;
      • timely provide notice to HUD of the death of the last surviving Borrower or
      conveyance of title within 60 Days of the occurrence of the Due and Payable
      event; • timely provide notice to HUD within 60 days after the end of the Deferral
      Period; III. SERVICING AND LOSS MITIGATION B. Title II Insured Housing Programs
      Reverse Mortgages 2. Default Servicing Handbook 4000.1 1515 Last Revised: 11/26/2025
      • timely provide the required due and payable notice to the Eligible NBS within
      30 Days after the end of the Deferral Period; • timely provide the required
      due and payable notice to the Borrower, their estate, heir, or other party with
      legal title to the Property that the HECM is Due and Payable within 30 Days
      of providing notice to HUD of the Due and Payable event or receiving HUD approval
      when needed; • comply with the required appraisal time frames; • timely commence
      foreclosure, when applicable; • timely provide notice to HUD after commencing
      foreclosure, meeting reasonable diligence requirements, or meeting reporting
      requirements, pursuant to Appendix 6.0; and • timely file claims for payment
      of insurance benefits. The Mortgagee must self-curtail claims for failure to
      meet any of FHA’s requirements or reasonable diligence time frames of 24 CFR
      §§ 206.125 and 206.127 except to the extent those time frames are extended by
      HUD, as authorized by law. In that event, the Mortgagee must self-curtail claims
      when they fail to comply within the extended time. The Mortgagee must state
      the reason for curtailment in the “Mortgagee Comments” section of the claim
      in HERMIT. If the Mortgagee does not self-curtail when reasonable diligence
      time frames are not met, the Mortgagee must fully document in HERMIT the reasons
      for delays that were outside of the Mortgagee’s control. (H) Reporting Use of
      Mortgagee Extension If applicable, the Mortgagee must enter the expiration date
      of the 90-Day extension period in the block identified for extensions in the
      claim in HERMIT and note the use of the extension in the “Mortgagee’s Comments”
      section. (I) Mortgagee Incentives FHA will pay an incentive fee to Mortgagees
      for completion of a Short Sale or a DIL in the amount of $1,500.00. The Mortgagee
      must enter the incentive amount in block 305 of form HUD-27011, Single-Family
      Application for Insurance Benefits. (J) Probate Costs Where permitted to be
      paid as a Cash for Keys incentive, probate costs may not exceed $5,000.00. Any
      probate costs claimed over $500.00 require supporting documentation. The probate
      costs must be reasonable and customary for the area. The Mortgagee must enter
      the probate costs in block 305 of form HUD-27011. III. SERVICING AND LOSS MITIGATION
      B. Title II Insured Housing Programs Reverse Mortgages 2. Default Servicing
      Handbook 4000.1 1516 Last Revised: 11/26/2025 ii. Acquired Property Claims (Claim
      Type 21) Date of Marketable Title for HECM Claims The Mortgagee must use the
      latter of the following in determining the “Date of Possession and Acquisition
      of Marketable Title” on the claim: • the date of possession, including when
      eviction is required; • the date of the foreclosure sale; • the date title is
      obtained by a third-party bidder; or • the date the redemption period, if applicable,
      has ended. iii. Assignment Claims (Claim Type 22) The Mortgagee may file a HECM
      Assignment Claim (Claim Type 22) upon successful assignment of a HECM to HUD.
      iv. Short Sale Claims (Claim Type 23) The Mortgagee may file a HECM Short Sale
      Claim (Claim Type 23) in cases where: • the Borrower sold the Property, but
      the sales proceeds were insufficient to satisfy the HECM, provided: • the Property
      was sold for at least the current appraised value if the HECM was not Due and
      Payable; or • the Property was sold for at least 95 percent of the current appraised
      value if the HECM was Due and Payable; or • the HECM was extinguished by sale
      or transfer after death or, if applicable, the end of a Deferral Period, provided
      the Mortgagee received, in exchange for the extinguishment of the HECM, at least
      the lesser of: • the HECM balance; or • 95 percent of the current appraised
      value of the Property. (A) Claim Calculation – Case Number Assigned before September
      19, 2017 The claim amount will include: • the total of the following: • the
      HECM balance, including any accrued interest, MIP, and servicing fees that have
      been added to the HECM balance; • any accrued note rate interest, MIP, or servicing
      fees that have not been added to the HECM balance on the date the deed is recorded;
      and • the amount of allowances for items set forth in 24 CFR § 206.129(d)(3)(i)–(vii)
      and (d)(3)(xii) as applicable; • less the proceeds received from the Borrower,
      the Borrower’s estate, or heir; • plus, if the short sale occurred after the
      initiation of foreclosure, the total of the items set forth in 24 CFR § 206.129(d)(3)(vi)
      and (ix), as applicable. III. SERVICING AND LOSS MITIGATION B. Title II Insured
      Housing Programs Reverse Mortgages 2. Default Servicing Handbook 4000.1 1517
      Last Revised: 11/26/2025 The claim will also include debenture interest from
      the date the deed is recorded to the date when the claim is paid, providing
      the Mortgagee has complied with all applicable time frames required. Where the
      Mortgagee has failed to meet any of the applicable requirements within the specified
      time, or additional time approved by HUD, the interest allowance will be computed
      only to the date on which the particular action should have been taken or to
      which it was extended. (B) Claim Calculation – Case Number Assigned on or after
      September 19, 2017 (1) HECM Not Due and Payable When the HECM is not in Due
      and Payable status, the claim will include: • the total of the following: •
      the HECM balance, including any accrued interest, MIP, and servicing fees that
      have been added to the HECM balance; • any accrued note rate interest, MIP,
      and servicing fees that have not been added to the HECM balance on the date
      the deed is recorded; and • allowable closing costs incurred in connection with
      the sale of the Property in an amount not to exceed the greater of 11 percent;
      • less the proceeds received from the Borrower, the Borrower’s estate, or heir.
      The claim will also include debenture interest from the date the deed is recorded
      to the date when the claim is paid, provided the Mortgagee has complied with
      all applicable time frames required. Where the Mortgagee has failed to meet
      any of the applicable requirements within the specified time, or additional
      time approved by HUD, the interest allowance will be computed only to the date
      on which the particular action should have been taken or to which it was extended.
      (2) HECM Due and Payable When the HECM is in Due and Payable status, the claim
      will include: • the total of the following: • the HECM balance, including any
      accrued interest, MIP, and servicing fees that have been added to the HECM balance;
      • any accrued interest, MIP, and servicing fees that have not been added to
      the outstanding HECM balance as of the due date; • allowable closing costs incurred
      in connection with the sale of the Property in an amount not to exceed the greater
      of 11 percent or any fixed dollar amount as approved by HUD through the Federal
      Register notice as set forth in 24 CFR § 206.129(d)(3)(xiii)(C); and • the remaining
      items set forth in 24 CFR § 206.129(d)(3); • less the proceeds received from
      the Borrower, the Borrower’s estate, or heir. III. SERVICING AND LOSS MITIGATION
      B. Title II Insured Housing Programs Reverse Mortgages 2. Default Servicing
      Handbook 4000.1 1518 Last Revised: 11/26/2025 The claim will also include debenture
      interest from the due date to the date the claim is paid, providing the Mortgagee
      has complied with all applicable time frames required. Where the Mortgagee has
      failed to meet any of the applicable requirements of 24 CFR §§ 206.125 and 206.127
      within the specified time determined by the due date, or additional time approved
      by HUD, the interest allowance will be computed only to the date on which the
      particular action should have been taken or to which it was extended. v. Supplemental
      Claims (Claim Type 24) The Mortgagee may file one supplemental claim (Claim
      Type 24) to correct a previous claim or to claim an item omitted in a previous
      claim. Where the Mortgagee wishes to file a supplemental claim, the Mortgagee
      must submit such claim within six months of the date the initial claim was paid.
      III. SERVICING AND LOSS MITIGATION B. Title II Insured Housing Programs Reverse
      Mortgages'
  judgment: false
