source:
  type: regulation
  id: hud-4000-1-iii-a-2
  authority: HUD Handbook 4000.1 Part III.A.2 — Default Servicing (Forward Mortgages)
  description: 'HUD Handbook 4000.1 Part III.A.2 governs Default Servicing for FHA

    forward mortgages: Delinquency vs Default definitions (Default =

    30-day uncorrected failure); standard requiring FHA-conforming

    servicing of delinquent/default loans; 30-day-month convention for

    Default-related timelines; CRA + IRS reporting accuracy; Late

    Charge 15-day-late trigger and 4% P&I cap (post-3/14/2016 cases);

    advance-written-notice requirement before assessing Late Charge.

    Fills HUD 4000.1 Part III.A.2 chapter gap.

    '
obligations:
- id: hud-4000-1-iii-a-2-full
  canonical_id: hud-4000-1-iii-a-2-full
  section: HUD Handbook 4000.1 Part III.A.2
  description: "Mortgages in Delinquency or Default: a. Mortgages in Delinquency or Default (03/31/2022)\
    \ \nA Mortgage is Delinquent any time a Mortgage Payment is due and not paid. \nA Mortgage is in Default\
    \ when the Borrower fails to make any payment or perform any \nother obligation under the Mortgage,\
    \ and such failure continues for a period of 30 Days…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 III.A.2.a.i — Definitions
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/40001HSGH.pdf
    snapshot_id: 3bf33edadcf6461d
    fetched_at: '2026-05-25T14:10:11Z'
    content_hash: sha256:e1c2dc1c75ddb0ee32fe5c2fb7c9bb19f1c93b48a3e26e6d63dc6e7f37c92ec0
    paragraph_quote: "a. Mortgages in Delinquency or Default (03/31/2022) \nA Mortgage is Delinquent any\
      \ time a Mortgage Payment is due and not paid. \nA Mortgage is in Default when the Borrower fails\
      \ to make any payment or perform any \nother obligation under the Mortgage, and such failure continues\
      \ for a period of 30 Days. \nThe date of Default is 30 Days after: \n• the first uncorrected failure\
      \ to perform any obligation under the Mortgage; or \n• the first failure to make a monthly payment\
      \ which subsequent payments by the \nBorrower are insufficient to cover when applied to the overdue\
      \ monthly payment \nin the order in which they become due. \n\n \nThe Mortgagee must ensure FHA-insured\
      \ Mortgages in Delinquency or Default are \nserviced in accordance with FHA requirements and applicable\
      \ laws. \nFor the purpose of determining the date of Default and timelines related to Default, HUD\
      \ \nconsiders all months to have 30 Days. \nb. Reporting to Consumer Reporting Agencies and the\
      \ IRS (03/31/2022) \nThe Mortgagee is responsible for: \n• complying with applicable law and federal\
      \ regulations relating to reporting to \nconsumer reporting agencies; and \n• ensuring that all\
      \ reported information is accurate. \nThe Mortgagee is also responsible for any required IRS reporting\
      \ regarding acquisition of \nsecured Property or cancellation of mortgage debt, in accordance with\
      \ the Internal Revenue \nCode (IRC). \nc. Late Charges (10/01/2025) \nLate Charges are charges assessed\
      \ if a Mortgage Payment is received more than 15 Days \nafter the due date. \nThe Mortgagee may\
      \ consider a Borrower’s Mortgage Payment late if the payment is \nreceived by the Mortgagee more\
      \ than 15 Days after the due date, except for payments \nreceived from Borrowers in accordance with\
      \ a Trial Payment Plan Agreement. The \nMortgagee may assess a late charge on the 17th Day of the\
      \ month. \nFor Mortgages assigned a case number on or after March 14, 2016, the Mortgagee may \n\
      assess a Late Charge, not to exceed 4 percent of the overdue payment of P&I and in \naccordance\
      \ with applicable state and federal laws. \nFor Mortgages assigned a case number before March 14,\
      \ 2016, the Mortgagee may assess \na Late Charge calculated based on overdue PITI if permitted under\
      \ the terms of the \nmortgage Note and under applicable state and federal laws. \n(A) Notifying\
      \ the Borrower of the Late Charge \nBefore collecting the Late Charge or returning a Mortgage Payment\
      \ to the Borrower \nfor failing to pay the Late Charge, the Mortgagee must provide the Borrower\
      \ with an \nadvance written notice of the charge."
    drafter_attestation: Verbatim section from snapshot 3bf33edadcf6461d; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
