source:
  type: regulation
  id: fha-24cfr-203.500
  authority: "24 CFR §203.500 — Mortgage servicing generally"
  description: "24 CFR §203.500 establishes the general FHA single-family servicing\nframework under Part 203 Subpart C.\n"
obligations:
- id: fha-24cfr-203.500-subpart-c-compliance-required
  canonical_id: fha-24cfr-203.500-subpart-c-compliance-required
  section: "24 CFR §203.500 — Mandatory compliance with Subpart C servicing practices"
  description: "[LENDER], as an FHA-approved mortgagee servicing FHA-insured mortgages,\nmust comply with the servicing practices specified in 24 CFR Part 203\nSubpart C; failure to comply is not a basis for denial of insurance\nbenefits but is cause for imposition of a civil money penalty\n(including a penalty under §30.35(c)(2)) or withdrawal of HUD's\napproval of [LENDER]. [LENDER] shall not commence foreclosure or\nacquire title until the Subpart C requirements have been followed.\n"
  type: do
  audit_question: "Can [LENDER] evidence (i) that it follows the Subpart C FHA single-family servicing practices on every FHA-insured loan it services, and (ii) that no foreclosure was commenced and no title was acquired before the applicable §203.500 Subpart C requirements were satisfied?"
  workflow_phase: servicing
  owner_role: default_servicing_analyst
  secondary_owner_role: compliance_officer
  cadence: per-fha-serviced-loan
  consequence: "civil money penalty (including §30.35(c)(2)) or withdrawal of HUD mortgagee approval"
  tags:
  - round-b
  - regulator-direct
  - fha
  - servicing
  - subpart-c
  - promoted
  primary_source:
    tier: 1
    authority: "24 CFR §203.500"
    source_class: fha-regulation
    source_url: https://www.law.cornell.edu/cfr/text/24/203.500
    snapshot_id: 32afd0af85c1c567
    fetched_at: '2026-05-22T18:52:44Z'
    content_hash: sha256:687947470773079bebf22888e04b765625aaeb907097f0d75bbf13a6a3eac722
    paragraph_quote: "This subpart identifies servicing practices of lending institutions that HUD considers acceptable for mortgages insured by HUD. Failure to comply with this subpart shall not be a basis for denial of insurance benefits, but failure to comply will be cause for imposition of a civil money penalty, including a penalty under § 30.35(c)(2) , or withdrawal of HUD's approval of a mortgagee . It is the intent of the Department that no mortgagee shall commence foreclosure or acquire title to a property until the requirements of this subpart have been followed."
    drafter_attestation: "Copied verbatim from snapshot 32afd0af85c1c567 (content.txt) at\n2026-05-22T19:08Z. Substring is the entire §203.500 operative\nparagraph.\n"
  promoted_at: '2026-05-22T19:10:07+00:00'
  promoted_from: fha-24cfr-203.500-roundb-v1.yaml
  program_review: Do the servicing P&Ps ensure Subpart C practices are followed on every FHA-insured loan, AND that no foreclosure is commenced and no title acquired until the applicable Subpart C requirements are satisfied?
  file_review: Pull serviced loans including foreclosure/title-acquisition cases; confirm Subpart C practices were followed and that the foreclosure/title-acquisition preconditions were met first.
  judgment: false
  feeds:
  - fha-24cfr-203.500-foreclosure-and-title-precondition
- id: fha-24cfr-203.500-foreclosure-and-title-precondition
  canonical_id: fha-24cfr-203.500-foreclosure-and-title-precondition
  section: "24 CFR §203.500 — No foreclosure / title acquisition until Subpart C followed"
  description: "[LENDER], as an FHA-approved mortgagee servicing FHA-insured\nmortgages, shall not commence foreclosure or acquire title to a\nproperty until the requirements of 24 CFR Part 203 Subpart C have\nbeen followed. This is the Department of HUD's stated intent in\n§203.500 and operates as a procedural precondition on foreclosure /\ntitle-acquisition activity.\n"
  type: do
  audit_question: For every FHA-insured loan [LENDER] services where foreclosure has been commenced or title has been acquired, can [LENDER] evidence that the applicable Part 203 Subpart C servicing-practice requirements were completed before foreclosure was commenced or title acquired?
  workflow_phase: servicing
  owner_role: default_servicing_analyst
  secondary_owner_role: compliance_officer
  cadence: per-fha-foreclosure-or-title-acquisition
  consequence: ''
  tags:
  - round-c
  - regulator-direct
  - fha
  - servicing
  - foreclosure-precondition
  - subpart-c
  - promoted
  primary_source:
    tier: 1
    authority: "24 CFR §203.500"
    source_class: fha-regulation
    source_url: https://www.law.cornell.edu/cfr/text/24/203.500
    snapshot_id: 32afd0af85c1c567
    fetched_at: '2026-05-22T18:52:44Z'
    content_hash: sha256:687947470773079bebf22888e04b765625aaeb907097f0d75bbf13a6a3eac722
    paragraph_quote: It is the intent of the Department that no mortgagee shall commence foreclosure or acquire title to a property until the requirements of this subpart have been followed.
    drafter_attestation: "Copied verbatim from snapshot 32afd0af85c1c567 (content.txt) at\n2026-05-24T20:20Z. Substring is the §203.500 closing sentence\nstating HUD's intent that foreclosure / title acquisition not\noccur until Subpart C is followed.\n"
  promoted_at: '2026-05-24T20:12:08+00:00'
  promoted_from: fha-24cfr-203.500-roundc-v1.yaml
  program_review: Does the program gate foreclosure commencement and title acquisition behind completion of the applicable Part 203 Subpart C servicing-practice requirements?
  file_review: For the foreclosure-commenced / title-acquired population, confirm the Subpart C requirements were completed before foreclosure was commenced or title acquired — read against the servicing notes.
  judgment: false
- id: fha-24cfr-203.500-civil-money-penalty-consequence
  canonical_id: fha-24cfr-203.500-civil-money-penalty-consequence
  section: "24 CFR §203.500 — Consequence of noncompliance: civil money penalty / mortgagee-approval withdrawal"
  description: "Failure by [LENDER] to comply with FHA Part 203 Subpart C servicing\npractices is not a basis for denial of insurance benefits but is\ncause for imposition of a civil money penalty (including a penalty\nunder §30.35(c)(2)) or withdrawal of HUD's approval of [LENDER] as\nan FHA mortgagee. [LENDER]'s compliance-management framework must\ntreat Subpart C noncompliance as a HUD-enforcement-tier finding\nrather than merely an insurance-benefit risk.\n"
  type: do
  audit_question: "Can [LENDER] evidence that its compliance-management framework treats §203.500 Subpart C noncompliance as a HUD-enforcement-tier exposure (civil money penalty under §30.35(c)(2) or mortgagee-approval withdrawal), and that findings are tracked, root-caused, and remediated accordingly?"
  workflow_phase: servicing
  owner_role: compliance_officer
  secondary_owner_role: default_servicing_analyst
  cadence: ongoing
  consequence: "civil money penalty (including §30.35(c)(2)) or withdrawal of HUD mortgagee approval"
  tags:
  - round-c
  - regulator-direct
  - fha
  - servicing
  - civil-money-penalty
  - mortgagee-approval-withdrawal
  - subpart-c
  - promoted
  primary_source:
    tier: 1
    authority: "24 CFR §203.500"
    source_class: fha-regulation
    source_url: https://www.law.cornell.edu/cfr/text/24/203.500
    snapshot_id: 32afd0af85c1c567
    fetched_at: '2026-05-22T18:52:44Z'
    content_hash: sha256:687947470773079bebf22888e04b765625aaeb907097f0d75bbf13a6a3eac722
    paragraph_quote: "Failure to comply with this subpart shall not be a basis for denial of insurance benefits, but failure to comply will be cause for imposition of a civil money penalty, including a penalty under §  30.35(c)(2) , or withdrawal of HUD's approval of a mortgagee ."
    drafter_attestation: "Copied verbatim from snapshot 32afd0af85c1c567 (content.txt) at\n2026-05-24T20:20Z. Substring is the §203.500 consequence-of-\nnoncompliance sentence.\n"
  promoted_at: '2026-05-24T20:12:08+00:00'
  promoted_from: fha-24cfr-203.500-roundc-v1.yaml
  program_review: Does the compliance-management framework treat Subpart C noncompliance as a HUD-enforcement-tier exposure (civil money penalty under §30.35(c)(2) or mortgagee-approval withdrawal), with findings tracked, root-caused, and remediated?
  file_review: Review the findings/issue log and remediation records; confirm Subpart C findings are escalated and remediated as enforcement-tier, not merely insurance-benefit, risk.
  judgment: false
_promotion_history:
- promoted_at: '2026-05-22T19:10:07+00:00'
  candidate_path: obligations\_remediation\_round_b_drafts\fha-24cfr-203.500-roundb-v1.yaml
  candidates_promoted: 1
  candidates_skipped_existing: 0
- promoted_at: '2026-05-24T20:12:08+00:00'
  candidate_path: obligations\_remediation\round-c-type-a\fha-24cfr-203.500-roundc-v1.yaml
  candidates_promoted: 2
  candidates_skipped_existing: 0
