source:
  type: guide
  id: hud-4000-1-iii-b-responsibility-for-servicing-actions
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — b. Responsibility
    for Servicing Actions (10/01/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — b. Responsibility
    for Servicing Actions (10/01/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-b-responsibility-for-servicing-actions-full
  canonical_id: hud-4000-1-iii-b-responsibility-for-servicing-actions-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — b. Responsibility
    for Servicing Actions (10/01/2025)
  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 — b. Responsibility
      for Servicing Actions (10/01/2025)
    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: 'b. Responsibility for Servicing Actions (10/01/2025) Mortgage
      Holders are responsible for all servicing actions, including the acts of its
      Servicers. Servicers are responsible for their actions in servicing FHA-insured
      Mortgages, Partial Claim Subordinate Mortgages, and Payment Supplement Subordinate
      Mortgages. The Servicer is also responsible for actions taken at the direction,
      or on behalf, of the Mortgage Holder. The costs associated with subservicing
      may not be imposed on the Borrower or passed along to HUD in a claim for mortgage
      insurance benefits. i. Responsibility during Transfers of Servicing Rights (A)
      Definitions The Transferor Servicing Mortgagee is the Mortgage Servicer that
      transfers servicing responsibilities. The Transferee Servicing Mortgagee is
      the Mortgage Servicer to which the servicing responsibilities have been transferred.
      The Transfer Date is the date on which the Borrower’s Mortgage Payment is first
      due to the Transferee Servicing Mortgagee. (B) Standard The Transferor Servicing
      Mortgagee remains responsible for the servicing of an FHA-insured Mortgage,
      any Payment Supplement(s), and any Partial Claim(s) before the Partial Claim
      documents have been recorded and delivered to HUD until the Transfer Date. The
      Transferor Servicing Mortgagee: • must verify that the change of legal rights
      to service has been reported accurately; and III. SERVICING AND LOSS MITIGATION
      A. Title II Insured Housing Programs Forward Mortgages 1. Servicing of FHA-Insured
      Mortgages Handbook 4000.1 1156 Last Revised: 11/26/2025 • may transfer the Borrower’s
      language preference to the Transferee Servicing Mortgagee. On the Transfer Date,
      the Transferee Servicing Mortgagee assumes responsibility for: • all servicing
      actions, including: o ensuring resolution of any servicing errors that were,
      and remain, the responsibility of the Transferor Servicing Mortgagee; o where
      applicable, reporting the Delinquency/Default Status (DDS) Codes in HUD’s Single
      Family Default Monitoring System (SFDMS); • obtaining the complete mortgage
      file, including origination and servicing records; • all servicing actions associated
      with any Partial Claim(s) and Payment Supplement(s), as required; and • ensuring
      that the original Mortgages, mortgage Notes, or deeds of trust are preserved.
      The Transferee Servicing Mortgagee must also ensure transfer of any outstanding
      Payment Supplement Account and associated servicing records. Where applicable,
      on the Transfer Date, the Transferee Servicing Mortgagee assumes responsibility
      for: • all servicing actions associated with the Payment Supplement, including
      but not limited to: • accounting of funds held in the Payment Supplement Account
      related to a Borrower’s Payment Supplement; and • administration of the Borrower’s
      Payment Supplement; • obtaining the complete files relating to the Payment Supplement;
      and • obtaining any outstanding funds in the Payment Supplement Account. (C)
      Required Documentation The Transferor Servicing Mortgagee must report the Transfer
      Date and update the mortgage record in FHA Connection (FHAC) or by Electronic
      Data Interchange (EDI) or Business to Government (B2G) within 15 Days of the
      Transfer Date. ii. Responsibility for Servicing when the Mortgage is Sold (A)
      Definition A Mortgage Sale is a transaction in which a Mortgage Holder sells
      the Mortgage to another FHA-approved Mortgagee. The Selling Mortgage Holder
      or Selling Mortgagee is the Mortgagee that sells the Mortgage and thereby relinquishes
      all rights and obligations under the contract for mortgage insurance. III. SERVICING
      AND LOSS MITIGATION A. Title II Insured Housing Programs Forward Mortgages 1.
      Servicing of FHA-Insured Mortgages Handbook 4000.1 1157 Last Revised: 11/26/2025
      The Purchasing Mortgage Holder or Purchasing Mortgagee is the Mortgagee that
      purchases the Mortgage and thereby succeeds to all rights and obligations of
      the Selling Mortgage Holder under the contract for mortgage insurance. (B) Standard
      The Selling Mortgage Holder relinquishes all rights and obligations under the
      contract for mortgage insurance on the effective date of the sale. The Selling
      Mortgage Holder remains responsible for Mortgage Insurance Premiums (MIP) until
      notice of the sale is received by HUD via FHAC, EDI, or B2G. As of the effective
      date of the sale, the Purchasing Mortgage Holder becomes responsible for outstanding
      MIP obligations, regardless of the date of accrual, and must confirm that the
      details of the Mortgage Sale have been reported accurately. (C) Required Documentation
      The Selling Mortgage Holder must report the effective date of the Mortgage Sale
      as the Transfer Date and update the mortgage record in FHAC or by EDI or B2G
      within 15 Days of the date of the Mortgage Sale. iii. Registration with Mortgage
      Electronic Registration System, Inc. (A) Definition The Mortgage Electronic
      Registration System (MERS) is an electronic tracking system identified as nominee
      for a holder of a Mortgage. (B) Standard Mortgagees may voluntarily register
      FHA-insured Mortgages with MERS. The holder remains responsible for all servicing
      actions.'
  judgment: false
