source:
  type: regulation
  id: hud-ml-2024-02
  authority: "HUD Mortgagee Letter 2024-02 — Payment Supplement"
  description: 'HUD ML 2024-02 establishes the Payment Supplement loss mitigation option,

    combining a standalone Partial Claim to bring the Mortgage current with a

    new Monthly Principal Reduction (MoPR) for a three-year period, and

    establishes related servicing-transfer responsibilities and SFDMS

    reporting requirements for Mortgages in a Payment Supplement Period.

    '
obligations:
- id: hud-ml-2024-02-servicing-laws-compliance
  canonical_id: hud-ml-2024-02-servicing-laws-compliance
  section: "HUD ML 2024-02 — Laws and Requirements Applicable to Mortgage Servicing (III.A.1.a.ii(A))"
  description: '[LENDER], as an FHA-approved Mortgagee servicing FHA-insured Mortgages,

    must comply with all laws, rules, and requirements applicable to mortgage

    servicing, including full compliance with the applicable requirements

    under the purview of the Consumer Financial Protection Bureau (CFPB)

    (including RESPA and TILA), and, if applicable, Ginnie Mae''s

    mortgage-backed securities requirements. FHA requirements that are more

    stringent or restrictive than applicable law (as set forth in Handbook

    4000.1) override the lesser standard.

    '
  type: do
  audit_question: Can [LENDER] evidence that its FHA mortgage-servicing program operates in full compliance with CFPB-administered requirements (RESPA, TILA), Ginnie Mae MBS requirements where applicable, and the more-stringent FHA requirements in Handbook 4000.1?
  workflow_phase: servicing
  owner_role: default_servicing_analyst
  secondary_owner_role: compliance_officer
  cadence: continuous
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - servicing
  - cross-regulator-compliance
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2024-02 — III.A.1.a.ii(A)"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2024-02hsgml.pdf
    snapshot_id: cc5f3927701cb91d
    fetched_at: '2026-05-22T19:54:43Z'
    content_hash: sha256:5d8f93a36285a3bf371f4d5311a7bbc693e7b1c92a80d4a20d11a54586e6126f
    paragraph_quote: "Mortgagees must comply with all laws, rules, and requirements applicable \nto mortgage servicing, including full compliance with the applicable \nrequirements under the purview of the Consumer Financial Protection \nBureau (CFPB), including the Real Estate Settlement Procedures Act \n(RESPA) and the Truth in Lending Act (TILA), and, if applicable, Ginnie \nMae’s mortgage-backed securities requirements."
    drafter_attestation: 'Copied verbatim from snapshot cc5f3927701cb91d (content.txt) at

      2026-05-22T20:00Z. Substring corresponds to the Laws and Requirements

      Applicable to Mortgage Servicing standard incorporated in

      Handbook 4000.1 III.A.1.a.ii(A) by ML 2024-02.

      '
  promoted_at: '2026-05-22T20:03:40+00:00'
  promoted_from: hud-ml-2024-02-roundb-v1.yaml
  program_review: Do the servicing P&Ps ensure full compliance with CFPB-administered RESPA/TILA, Ginnie Mae MBS requirements where applicable, and the more-stringent FHA Handbook 4000.1 requirements?
  file_review: Review servicing P&Ps, training, and QA samples; confirm coverage of RESPA/TILA, Ginnie Mae MBS where applicable, and the more-stringent FHA requirements.
  judgment: false
- id: hud-ml-2024-02-sfdms-payment-supplement-reporting
  canonical_id: hud-ml-2024-02-sfdms-payment-supplement-reporting
  section: "HUD ML 2024-02 — SFDMS Default Reporting: Types of Mortgages to Report (III.A.2.h.ii(B)(1))"
  description: 'Each month, [LENDER] must report Default servicing activities through

    HUD''s Single Family Default Monitoring System (SFDMS) for all Mortgages

    that are 30, 60, and 90 Days or more in Default, and for all Mortgages

    in a Payment Supplement Period, as of the last Day of the month.

    '
  type: do
  audit_question: For each monthly SFDMS reporting cycle, can [LENDER] demonstrate that it reported Default servicing activities for every FHA-insured Mortgage that was 30, 60, or 90+ Days delinquent, and for every Mortgage in a Payment Supplement Period, as of the last Day of the month?
  workflow_phase: servicing
  owner_role: default_servicing_analyst
  secondary_owner_role: compliance_officer
  cadence: monthly
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - servicing
  - sfdms-reporting
  - payment-supplement
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2024-02 — III.A.2.h.ii(B)(1)"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2024-02hsgml.pdf
    snapshot_id: cc5f3927701cb91d
    fetched_at: '2026-05-22T19:54:43Z'
    content_hash: sha256:5d8f93a36285a3bf371f4d5311a7bbc693e7b1c92a80d4a20d11a54586e6126f
    paragraph_quote: "Each month, the Mortgagee must report Default servicing activities for all \nMortgages that are 30, 60, and 90 Days or more in Default and all \nMortgages in a Payment Supplement Period, as of the last Day of the month."
    drafter_attestation: 'Copied verbatim from snapshot cc5f3927701cb91d (content.txt) at

      2026-05-22T20:00Z. Substring is the SFDMS reporting standard

      incorporated into Handbook 4000.1 III.A.2.h.ii(B)(1) by ML 2024-02

      and extended to cover Payment Supplement Period mortgages.

      '
  promoted_at: '2026-05-22T20:03:40+00:00'
  promoted_from: hud-ml-2024-02-roundb-v1.yaml
  program_review: Do the P&Ps ensure monthly SFDMS reporting covers every Mortgage 30/60/90+ Days in Default and every Mortgage in a Payment Supplement Period as of month-end?
  file_review: Pull a monthly SFDMS cycle; confirm reporting for all 30/60/90+-day-delinquent loans and all Payment-Supplement-Period loans as of the last day of the month.
  judgment: false
- id: hud-ml-2024-02-servicing-transfer-payment-supplement
  canonical_id: hud-ml-2024-02-servicing-transfer-payment-supplement
  section: "HUD ML 2024-02 — Responsibility during Transfers of Servicing Rights (III.A.1.b.i(B))"
  description: "Where [LENDER] is the Transferee Servicing Mortgagee on a Transfer Date,\n[LENDER] must ensure transfer of any outstanding Payment Supplement\nAccount and associated servicing records, and assume responsibility for\nall servicing actions associated with the Payment Supplement — including\naccounting of funds held in the Payment Supplement Account, administration\nof the Borrower's Payment Supplement, obtaining the complete Payment\nSupplement files, and obtaining any outstanding funds in the Payment\nSupplement Account.\n"
  type: do
  audit_question: For every servicing-rights transfer involving an FHA-insured Mortgage with an active Payment Supplement, can [LENDER] (as Transferee Servicing Mortgagee) evidence transfer of the Payment Supplement Account, associated servicing records, complete Payment Supplement files, and outstanding Payment Supplement Account funds on or about the Transfer Date?
  workflow_phase: servicing
  owner_role: default_servicing_analyst
  secondary_owner_role: compliance_officer
  cadence: per-servicing-transfer
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - servicing
  - servicing-transfer
  - payment-supplement
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2024-02 — III.A.1.b.i(B)"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2024-02hsgml.pdf
    snapshot_id: cc5f3927701cb91d
    fetched_at: '2026-05-22T19:54:43Z'
    content_hash: sha256:5d8f93a36285a3bf371f4d5311a7bbc693e7b1c92a80d4a20d11a54586e6126f
    paragraph_quote: "The Transferee Servicing Mortgagee must also ensure transfer of any \noutstanding Payment Supplement Account and associated servicing records."
    drafter_attestation: 'Copied verbatim from snapshot cc5f3927701cb91d (content.txt) at

      2026-05-22T20:00Z. Substring is the Transferee Servicing Mortgagee

      Payment Supplement transfer requirement added to Handbook 4000.1

      III.A.1.b.i(B) by ML 2024-02.

      '
  promoted_at: '2026-05-22T20:03:40+00:00'
  promoted_from: hud-ml-2024-02-roundb-v1.yaml
  program_review: Does the program account for the Payment-Supplement transfer condition — as Transferee Servicing Mortgagee, ensuring transfer of the Payment Supplement Account, associated records, complete Payment Supplement files, and outstanding funds on/about the Transfer Date?
  file_review: Spot-check servicing-transfer-in events with an active Payment Supplement; confirm transfer of the Payment Supplement Account, records, files, and outstanding funds.
  judgment: false
_promotion_history:
- promoted_at: '2026-05-22T20:03:40+00:00'
  candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2024-02-roundb-v1.yaml
  candidates_promoted: 3
  candidates_skipped_existing: 0
