HUD Handbook 4000.1 III.A.2.h — Loss Mitigation Program

hud-4000-1-iii-a-2-h

HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.h. See obligation entries for operative requirements and verbatim primary-source citations.

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source:
  type: regulation
  id: hud-4000-1-iii-a-2-h
  authority: HUD Handbook 4000.1 III.A.2.h — Loss Mitigation Program
  description: |
    HUD Single-Family Housing Policy Handbook 4000.1, Section III.A.2.h.
    See obligation entries for operative requirements and verbatim
    primary-source citations.
obligations:
  - id: hud-4000-1-iii-a-2-h-borrower-eligibility-verification
    canonical_id: hud-4000-1-iii-a-2-h-borrower-eligibility-verification
    section: HUD Handbook 4000.1 III.A.2.h.iii(A) — Eligibility to Participate in HUD Programs
    description: |
      Before offering any FHA Loss Mitigation Option, [LENDER] must verify
      that the Borrowers are eligible to participate in HUD's Loss
      Mitigation Program (no other FHA-insured real estate beyond the
      stated exceptions; no FHA-claim-paid prior loan within the past three
      years; no debarment/suspension/LDP for Loan Mod, Partial Claim,
      Combination, or Payment Supplement; no unresolved delinquent Federal
      Debt for Partial Claim / Combination / Payment Supplement).
    type: do
    audit_question: For every FHA-insured Mortgage in Default for which [LENDER] offered a Loss Mitigation Option, can [LENDER] evidence Borrower-eligibility verification under III.A.2.h.iii(A)?
    program_review: Does the program account for the loss-mit eligibility conditions before any option is offered — no other FHA-insured real estate beyond stated exceptions, no FHA-claim-paid prior loan within 3 years, no debarment/suspension/LDP for the relevant option, and no unresolved delinquent Federal Debt for Partial Claim/Combination/Payment Supplement?
    file_review: Spot-check loss-mit files; confirm documented Borrower-eligibility verification under III.A.2.h.iii(A) before the option was offered.
    judgment: false
    feeds:
      - hud-4000-1-iii-a-2-h-90-day-evaluation
    workflow_phase: servicing
    owner_role: loss_mitigation_specialist
    secondary_owner_role: default_servicing_analyst
    cadence: per-loss-mit-evaluation
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - loss-mitigation
      - borrower-eligibility
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.h.iii(A) — Eligibility to Participate in HUD Programs
      source_class: hud-handbook-4000-1
      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: 'The Mortgagee must verify that the Borrowers are eligible to participate in HUD’s '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.h.iii(A)) at 2026-05-23.
    promoted_at: '2026-05-23T00:46:59+00:00'
    promoted_from: hud-4000-1-iii-a-2-h-roundb-v1.yaml
  - id: hud-4000-1-iii-a-2-h-90-day-evaluation
    canonical_id: hud-4000-1-iii-a-2-h-90-day-evaluation
    section: HUD Handbook 4000.1 III.A.2.h.iii(B) — 90-Day Review
    description: |
      For each FHA-insured forward Mortgage in Default, [LENDER] must
      complete an evaluation of the Defaulted Mortgage for appropriate Loss
      Mitigation Options before four monthly installments are due and
      unpaid, and send a written Notice to Borrower with the determination
      of eligibility.
    type: do
    audit_question: For every FHA-insured forward Mortgage in Default, can [LENDER] evidence completion of the loss-mit evaluation before four monthly installments became due and unpaid, and delivery of the written Notice to Borrower with the determination of eligibility?
    program_review: Do the P&Ps ensure each defaulted forward Mortgage is evaluated for loss-mit options BEFORE four monthly installments are due and unpaid, with a written Notice to Borrower stating the eligibility determination?
    file_review: Pull defaulted forward-Mortgage files; confirm the loss-mit evaluation completed before the 4th unpaid installment and the written Notice to Borrower with the determination.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: loss_mitigation_specialist
    secondary_owner_role: default_servicing_analyst
    cadence: per-defaulted-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - loss-mitigation
      - 90-day-review
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.h.iii(B) — 90-Day Review
      source_class: hud-handbook-4000-1
      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: 'A Mortgagee is required to complete an evaluation of a Defaulted Mortgage for '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.h.iii(B)) at 2026-05-23.
    promoted_at: '2026-05-23T00:46:59+00:00'
    promoted_from: hud-4000-1-iii-a-2-h-roundb-v1.yaml
  - id: hud-4000-1-iii-a-2-h-no-borrower-cash-contribution
    canonical_id: hud-4000-1-iii-a-2-h-no-borrower-cash-contribution
    section: HUD Handbook 4000.1 III.A.2.h.iv(B) — Evaluation of Borrower for Loss Mitigation Assistance, Standard
    description: |
      [LENDER] must not condition the use of a Loss Mitigation Option on
      the receipt of a Borrower's cash contribution or a Borrower's payment
      of fees or charges.
    type: dont
    audit_question: For every FHA Loss Mitigation Option offered, can [LENDER] evidence that the offer was not conditioned on a Borrower cash contribution or on Borrower payment of fees or charges?
    program_review: Do the P&Ps prohibit conditioning any Loss Mitigation Option on a Borrower cash contribution or payment of fees/charges?
    file_review: Pull loss-mit offers; confirm none was conditioned on a Borrower cash contribution or fee/charge payment.
    judgment: false
    feeds: []
    workflow_phase: servicing
    owner_role: loss_mitigation_specialist
    secondary_owner_role: compliance_officer
    cadence: per-loss-mit-offer
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - hud-handbook-4000-1
      - fha
      - servicing
      - loss-mitigation
      - no-upfront-cash
      - promoted
    primary_source:
      tier: 1
      authority: HUD Handbook 4000.1 III.A.2.h.iv(B) — Standard
      source_class: hud-handbook-4000-1
      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: 'The Mortgagee must not condition the use of a Loss Mitigation Option on the receipt '
      drafter_attestation: Copied verbatim from HUD Handbook 4000.1 snapshot 8c03836f77f317e1 (III.A.2.h.iv(B)) at 2026-05-23.
    promoted_at: '2026-05-23T00:46:59+00:00'
    promoted_from: hud-4000-1-iii-a-2-h-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-23T00:46:59+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\hud-4000-1-iii-a-2-h-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from HUD Handbook 4000.1 III.A.2.h — Loss Mitigation Program — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

HUD Handbook 4000.1 III.A.2.h.iii(A) — Eligibility to Participate in HUD Programs

The Mortgagee must verify that the Borrowers are eligible to participate in HUD’s

Source: HUD Handbook 4000.1 III.A.2.h.iii(A) — Eligibility to Participate in HUD Programs · source URL · snapshot 8c03836f77f317e1

HUD Handbook 4000.1 III.A.2.h.iii(B) — 90-Day Review

A Mortgagee is required to complete an evaluation of a Defaulted Mortgage for

Source: HUD Handbook 4000.1 III.A.2.h.iii(B) — 90-Day Review · source URL · snapshot 8c03836f77f317e1

HUD Handbook 4000.1 III.A.2.h.iv(B) — Evaluation of Borrower for Loss Mitigation Assistance, Standard

The Mortgagee must not condition the use of a Loss Mitigation Option on the receipt

Source: HUD Handbook 4000.1 III.A.2.h.iv(B) — Standard · source URL · snapshot 8c03836f77f317e1

Operationalizing HUD Handbook 4000.1 III.A.2.h — Loss Mitigation Program

This is verbatim, source-snapshotted regulator text from the Claude for Compliance open corpus. To turn a rule like this into compliance work product: gap-analyze your policies and procedures (P&Ps) against these requirements to surface stale, conflicting, or missing provisions; operationalize any change with a ready-to-run update kit; and produce audit-ready evidence — every step grounded only in the regulator’s own words, never invented.

Source of record: https://claudeforcompliance.com/regs/hud-4000-1-iii-a-2-h/ · register hud-4000-1-iii-a-2-h · Claude for Compliance. Free to read and download; see regulatory updates and methodology.