FHA Single Family Housing Policy Handbook 4000.1, Part IV — a. Processing of Claim Forms (01/02/2020)

FHA Single Family Housing Policy Handbook 4000.1, Part IV — a. Processing of Claim Forms (01/02/2020)

a. Processing of Claim Forms (01/02/2020) HUD will generate payment to the Mortgagee if: • the Mortgagee’s submission of Parts A and B pass all system edits and control checks; and • the Mortgagee provides all required documentation or makes all necessary updates to the suspended claim. HUD may reduce the claim payment if the claim lists unusually high disbursements that are not supported by documentation. HUD may require reimbursement of any amounts that are found to be excessive or not supported by appropriate documentation. When a Mortgagee files a claim, other than a supplemental claim or Loss Mitigation Incentive claim, after the expiration of a designated time period, HUD will accept these claims, which will be subject to interest curtailment. i. Initial Payment (A) Definition The Initial Claim Payment, which is referred to as the Partial Payment on the Advice of Payment, is the disbursement to the Mortgagee of funds relating to Part A of form HUD-27011. (B) Standard HUD will pay the unpaid principal balance plus debenture interest upon receipt and processing of Part A and required attachments. IV. CLAIMS AND DISPOSITION A. Title II Claims 3. Payment of Claims Handbook 4000.1 1620 Last Revised: 11/26/2025 Before debenture interest is calculated, HUD will reduce the unpaid principal balance by the greater of any damage or insurance recovery reported in Item 27. HUD’s Claims system will determine the amount of debenture interest. ii. Final and Full Payments (A) Definition The Final Claim Payment is the disbursement to the Mortgagee of funds relating to Part B of form HUD-27011 for conveyance claims. The Full Claim Payment is the disbursement to the Mortgagee of funds relating to Part A and Part B of form HUD-27011 for claims other than conveyance claims. (B) Standard As Final Claim Payment for conveyance claims, HUD will pay the Mortgagee’s expenses, allowances, and debenture interest upon receipt and processing of Part B and required attachments. As Full Claim Payment for claims other than conveyance claims, HUD will pay unpaid principal balance, the Mortgagee’s expenses, allowances, and debenture interest upon receipt and processing of Part A and Part B claims and required attachments.

Source: FHA Single Family Housing Policy Handbook 4000.1, Part IV — a. Processing of Claim Forms (01/02/2020) · source URL · snapshot 8c03836f77f317e1